Reward employees for service

Reward your faithful employees for long service. When a staff member has been employed by your business for at least 20 years, you can recognize that long service with a tax-free gift worth up to £1,000 – or £50 for every year of service. The gift must not be cash or vouchers, but it can be shares in your company or any other tangible object. You can present such a gift to the same employee every ten years, but not at more frequent intervals. The awards should be given under conditions and circumstances that do not create a significant likelihood of the payment being disguised compensation, or be given as a part of meaningful presentation.

There are two types of employee achievement award plans - tax qualified and non tax qualified. A tax qualified employee achievement award plan is an established written plan that does not discriminate or favour highly compensated employees. A tax qualified employee achievement award plan can deduct up to $1,600 for all employee achievement awards to the same employee on its tax return during a taxable year. The average cost of all employee achievement awards during the tax year for all employees cannot exceed $400.