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HMRC internal manual

Employment Income Manual

Employment income: exemption for long service testimonial awards: multiple awards

Section 323 ITEPA 2003

Section 323 ITEPA 2003 provides a tax exemption for long service testimonial awards that satisfy certain conditions (see EIM01500).

One of the conditions is that the taxable value of the award must not exceed £50 for each year of service with the same employer (£20 per year of service if the award was made on or before 12 June 2003). If an employee receives awards on two or more occasions (for example, after 20 years and then after 30 years service) the monetary limit is calculated separately on each occasion. The exempt amount available at the 30 year point is not affected by any exemption that may have been allowed in respect of the 20 year award.

Note, though, that no exemption is due if the employee has received another long service award, for service with the same employer, within the previous 10 years. So if an employee receives awards after 25 years and then again after 30 years, no exemption is due for the 30 year award because the 10 year rule is not satisfied.

For the purpose of the 10 year rule it does not matter if the earlier award did or did not qualify for exemption under Section 323. All earlier awards in respect of service with the same employer count for the purpose of the 10 year test, whether taxed or not.

See example EIM01510.