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Long term service award.. Did you get one was it TAXED?

Discussion in 'Retirement' started by Mazza6, Nov 10, 2015.

  1. Mazza6

    Mazza6 New commenter

    Good Morning everyone,can you help me in my fight ?i have retired after 37 years service for RotherhamMBC.
    I was pleased to hear that they will pay me a long service award £7 pa. I was planning a spending spree , as colleagues who retired recently were handed a cheque when they went to see the Mayor for tea.
    I was surprised , shocked in fact that the authority now insist on paying it through payroll so I will pay tax and N I on it. So much for the fat cats in Public Sector.
    Did you receive an award ? Were you taxed ?

    M
     
  2. marlin

    marlin Star commenter

    I got a £50 John Lewis voucher for my long service award. It wasn't as long as 37 years though.
     
  3. Rott Weiler

    Rott Weiler Star commenter Forum guide

    The rules are here on GOV.UK.

    As I read it if the Award is less than £50 for each year of service it's exempt from tax and NI.

    I wonder if you are assuming that because it's going to paid through payroll tax/NI will be deducted when it isn't going to be? Tax and payroll systems are usually flexible enough to make payments which are exempt from Tax/NI.
     
  4. Piranha

    Piranha Star commenter

    I don't think that right, Rott Weiler. If it is paid in cash (which includes "readily convertible" assets), then it is taxable. Note the words "non-cash" on the second page of the link you gave.
     
  5. jacob

    jacob Lead commenter

    If it is classed as "unearned income" it will not be subject to NI.
     
  6. Mazza6

    Mazza6 New commenter

    Thanks all for your replies. I had read Citizens Advice and HMRC I know you can have £1000 for 20 years tax free, don't know why Rotherham are doing it this way. The reply from work is ...I ought to be grateful as it is to be withdrawn soon due to Local Authority cuts.
     
  7. lizziescat

    lizziescat Star commenter

    I received a gift to the value of £200 (I think) for 25 years service from the LA and a £50 gift voucher from my school. Not taxed/NI , I thought this was because it was a gift rather than money.
    A few years later I received a thank you (monetary) gift from my school which was subject to tax.
     
    Mazza6 likes this.
  8. marlin

    marlin Star commenter

    @lizziescat My £50 was from the LA - nothing from school for long service. I've taught in more than one county - this was for 25 years in my last LA.
     
  9. lizziescat

    lizziescat Star commenter

    I suspect I was one of the last groups to benefit from such loyalty to staff. (From either school or LA) Have to say the head, at the time, the school and the LA all got more back from me (willingly) than I received.
    And this was way before expensive HR departments and their fancy policies and theories.
     
  10. marlin

    marlin Star commenter

    I know that members of staff that retired in the years before me were treated to an evening dinner event where they were thanked and given their award - not sure how much they got.

    My voucher arrived in the post.
     
  11. Sundaytrekker

    Sundaytrekker Star commenter

    My local authority stopped them some years ago. Something about it being unfair, discriminatory and a poor use of public money. So, if you're still getting one, enjoy!
     
    Mazza6 likes this.
  12. Piranha

    Piranha Star commenter

    I don't think that it is treated like this. According to gov.uk "If any of the long-service awards you provide aren’t exempt, you must report the costs to HMRC and deduct and pay tax and National Insurance on them." Exempt means not in cash with various additional criteria.
     
  13. Rott Weiler

    Rott Weiler Star commenter Forum guide

    You are right Piranha, I skim-read the exemptions too quickly and I missed the 'non-cash' requirement. I agree, all cash payments are taxable. I also agree with you that it's not unearned income - it's a payment derived from employment and taxed accordingly.

    They're not as common as they used to be - HR people nowadays tend to think long service shouldn't be rewarded.

    I worked for a UK family company once that had always rewarded long service. We were taken over by a US multi-national. At the first management meeting the new US CEO announced all long service award were abolished immediately. Telling us loyalty was of no interest to him, he only cared about results. Adding for good measure that all long service told him was you lacked the drive and imagination to move on somewhere else; it was a bad thing and shouldn't be rewarded. And (just to make sure we got the message) that he'd noticed that many of us had long service with the company and we might want to consider whether it was still the right place for us.

    That was telling us!
     
  14. Jolly_Roger1

    Jolly_Roger1 Star commenter

    A chap with whom I worked got a letter inviting him to go to the Civic Centre to receive his long service award. He shined his shoes, put on his good suit, and went off with the expectation that there was to be some sort of presentation. All that happened was that someone handed him an envelope with a certificate and some vouchers, asked him to sign for it, and sent him on his way. He wasn't pleased!
     
  15. Mazza6

    Mazza6 New commenter

    Oh bless him Jolly_Roger . At least I to get a party and meet the Major with other LA retirees! I am interested to hear that he got vouchers. What authority is that?
     
  16. Mazza6

    Mazza6 New commenter

    Which LA was that from Lizziecat?
     
  17. Jolly_Roger1

    Jolly_Roger1 Star commenter

    This was Hillingdon. This chap was also p*ssed off because what he got gave him the impression that someone had just scrabbled around in the bottom of their desk drawer to find something to put in the envelope, like £10 off vouchers for a subscription to the National Trust.
     
  18. chelsea2

    chelsea2 Star commenter

    What long service award? I retired last year after 34 years with the same authority and got zilch.
     
  19. phlogiston

    phlogiston Star commenter

    My school became an academy just when a long service award might have occurred.
     

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