Taxation of Employee Awards – Recognising Hard Work

It’s half term so I thought I would take the week off to give Mrs TTF a break from looking after Jabo  (#1 son) and Baby Jarvis (#2 son). Volunteering to be a stay at home Dad for the week seemed like a great idea.  Lots of brownie points whilst playing with Lego.  What could go wrong?

spoon

This morning (day 1) I woke to find Mrs TTF poking me because Baby Jarvis (#2 son) had been screaming for the last five minutes.  Jabo had also stirred and was trying to escape his cot and shouting Mummy.

As I had promised to deal with everything, this week, I staggered out of bed at 05:50 to start the day.   Being helpful I opened the blinds in the hallway and carried the two early risers downstairs safe in the knowledge that they would probably have a nap at some point (that’s what kids do I told myself.).  It’s at this point the whingeing/crying started.

Nobody warned me that two year olds are so particular about things.  The choice of breakfast cereal was the first sticking point.  It appears that not only does Jabo have the legal and moral right to change his mind on several occasions but he must also serve his choice of different shaped whole grain  to himself in the correct bowl otherwise MWAHHAHHAHAHHAHAHAHAHHA!

Whilst trying to pacify the irrational cereal fascist I also had a one year old hanging off my leg screaming as he was hungry.   When reading Jack Reacher novels I like to think that if I was whisked off to a CIA black site I would be hard to crack under torture.  In reality it was only 06:15 and I was broken by two children under three!

I eventually got everything under control and looked out at a lovely sunrise with a mug of coffee.  I then heard the door slam shut upstairs.  I thought this intimated that Mrs TTF was awake so I took a cup of tea and some toast up to her for breakfast in bed (even more brownie points on the cards).

Now I’m sure, like me, you were expecting an outburst of gratitude for my sacrifices.  But  no, instead I was told that

1.  I hadn’t got up like I promised

2.  The children had kept her awake.

3.  When she had fallen back to sleep the sun had woken her up from the blind I had opened

4.  I had just woken her up again bringing tea.

My only exasperated defense was I did try!

MAD AWARDS

I have been nominated in the Mum and Dad (MADS) blogging awards which is great news.  Blogging is a great tool not only to help yourself but to help others.  Which is the reason that I started this blog.

I come across so many parents who are not aware of the tax reliefs that they can claim but are scrimping and saving.  Not wanting to disparage other parenting blogs but if mums and dads understood the tax system then they may not have to up-cycle old cloths and make leftovers into another meal.  So it would be great if  you could vote for me in order to raise awareness throughout the hard-working network of mums and dads.

MADS

It would also make up for the lack of gratitude shown by Mrs TTF following my heroic efforts this morning!  In the meantime what tax reliefs are available for rewards?

THE TAX BIT

HMRC recognise that employers do give awards to employees for certain acts which should be tax-free.  The following are available:

Long Service Award

If you have been an employee for more than 20 years (I have been an employee for 16 so not long to go!) and your employer recognises this fact by way of an award it can potentially be free of income tax and national insurance.  The conditions are that:

The award must mark at least 20 years of service

Be a non cash gift which is less than £50 per year of service.

It is therefore possible to receive an item that you would have purchased with a value of at least £1,000 if you have worked in the same job for 20 years.

Financial Benefit Awards

If your employer were to run a suggestion scheme then a reward for ideas generated through the scheme that have a financial benefit to the employer will be tax-free up to a maximum of £5,000.

The scheme would need to be open to all employees and the employee should not have been able to make the suggestion in the normal course of their job.

If you come up with an idea which the employer acts upon and improves efficiency or effectiveness then you can receive a maximum of 50% of the first years saving or 10% of the first five years savings which ever is the greater.  As mentioned above this is capped at £5,000.

Plus I’m going to give you an idea to take to your employer.  Suggest that they should review their remuneration structure so that they can replace pay with tax efficient benefits.  This will not only save the employee tax but also the employer will save national insurance. The employer will also save in terms of efficiency as they may not have to complete as many P11ds.  Everyone’s a winner!

So don’t forget to vote for TheTaxFather.com either out of pity or to save some other hard-working parents some cash!

By Peter Cross

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