Long Service Award

Long Service Award

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I have just under a year to clarify this - so I thought I would start here!

An individual started work for a company at age 15 early in Jan 1958 . In December 2007 he will be 65 years old. As far as he is concerned hes has worked for the same company throughout this period except for a couple of month (I think 4 months) when they laid him off and he signed for unemployment benefit. Although they hold records of when he was first employed back in 1958, the payroll records his start date as Feb 1982, when he was re-employed after being laid of for a couple of months. (They made him apply formally for employment at the time).

The Company has changed ownership many times over the years. Company House records have the company starting in 1988.

What would others do? I have looked through the manuals, but wonder if perhaps I should write to HMRC for clarification/a ruling. Suggestions?

Frauke Golding

Replies (4)

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By neiltonks
09th Dec 2006 06:35

Does it matter?
I wonder why you are worrying about this.

Despite the not-uncommon lack of records going back that far, is there any real reason to doubt that this individual has spent his entire working life, almost 50 years by the time he retires, in the same employment?

The takeovers and the age of the current owners of the business are irrelevant as, surely, is the short period during which they laid him off a quarter of a century ago.

Give the man his award - he's more than earned it!

Neil.

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By User deleted
13th Dec 2006 17:14

Red alert on retirement payment
We have established that the employer can make a long service award of nearly £2500 with the recipient exempted from tax by the ever-generous HMRC. (This means I agree that a "start" date of 1958 should be demanded if the matter came to an argument).
Is the employer actually up to giving more? Then employ a Royal Navy minesweeper as you enter dangerous waters now with ex-gratia payments on retirement, especially if the employee is in an employer-funded scheme. If this is in the frame, I would recommend your taking specialist advice.

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By frauke
11th Dec 2006 18:21

HMRC Scrooge - definately
The company would like to know how much they can spend on a "present" (if they can come up with something he would want) so he and they don't end of with a potential tax bill because of it.

The is a lot of "bad history" with past management. I don't know the whole story - but he was supposed to retire when he was 60, but his pension fund was "pathetic". There was an occupational pension which got wound up over 15 years ago - and replaced by a group personal pension - but nothing was transfered over - so he lost everything from before that time. There was a lot of "poor/ bad advice" given in the past, hence the need "to get it right" this time.

He was actually not having any contributions paid into Pensions until earlier this year (Stopped at 60 yrs) when new management changed the rules so he became entitled to company pension contributions again. (They set up a stakeholder, as the GPP was not performing well) - Also his wife used to work for the company until she was made redundant some years ago, and she is very bitter about it. (They refuse to attend any company functions because of this.)

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By bfj
09th Dec 2006 10:14

Scrooge is alive , well and lives in Somerset House
Long service awards have , in general , always been taxable but there is exemption for some meeting certain conditions and limits. See S.323, ITEPA 2003 and EIM 01500 for the details . No cash , insists HMRC, but the employee can be given a present in kind costing no more than £50 p.a. for each year of service allowed (definitely ignore the short lay-off here).
Perhaps the employer wishes to be more generous? Have you looked at the possibilty of an ex-gratia payment on retirement or is the man already in his company's pension scheme?

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