Payments to employees by employers to mark long service are
taxable as earnings within Section 62 ITEPA 2003 (see
EIM00520 onwards and Weston v Hearn
(25TC425)), or as benefits within Section 201 (see
For 2002/03 and earlier years, some long service awards were exempt from tax under Extra- Statutory Concession A22 (see SE01500).
For 2003/04 onwards, the concession has been replaced by a statutory exemption in Section 323 ITEPA 2003. The conditions for exemption are as follows:
As regards multiple awards, see
If a non-cash award fails to satisfy the conditions for the exemption, or exceeds the £50 per year of service limit, the employer may be prepared to pay the tax due under a PAYE Settlement Agreement. Cash awards do not qualify for exemption at all, and the employer should operate PAYE.