Call me back

What are the tax implications, if a gift is given to the employee upon retirement?

Woefully, there is no specific exemption within the legislation for a gift to be made to an employee when they retire from their employment.  However, we may be able to employ the Long Service Award (ITEPA 2003 Section 323) exemption depending on the type of gift made and meeting certain conditions.

If the gift comprise of cash then the sum would always be treated as taxable (and NICable) under section 62 ITEPA 2003 because the gift is being received by basis of the employment.  If the company comprises a watch, this may meet the qualifying conditions for exemption as a Long Service Award.