§ Mr. McCrindleasked the Chancellor of the Exchequer whether he will make a statement about the tax treatment of long service awards to employees.
§ Mr. Peter ReesThe Inland Revenue has reviewed the published extra-statutory concession under which it does not seek to charge tax in respect of awards made to directors and employees as testimonials to mark long service, which take the form of tangible articles of reasonable cost, when the relevant period of service is not less than 20 years, and no similar award has been made to the recipient within the previous 10 years. Since 6 April 1977 an article has been taken to be of reasonable cost when the cost to the employer has not exceeded £3 per year of service.
The cost of an article will now be regarded as reasonable for this purpose if it does not exceed £10 per year of service, and this will apply to awards made on or after today.