It all started in June of 1965 when Queen Elizabeth II appointed all four members of The Beatles of the Order of the British Empire (MBE) after Prime Minister Harold Wilson nominated them for the award. That didn't go down very well with existing MBE recipients as at the time the honor was primarily bestowed upon military veterans and civic leaders. Some conservative MBE recipients returned their own insignia due to this.
On October 26 1965 the Beatles met Queen Elizabeth II in a ceremony at Buckingham Palace. According to John Lennon, he had to be talked into accepting the award by Beatles manager Brian Epstein. Later, joking that he thought the letter informing the band members they'd been selected was a notice that they'd been drafted, Lennon claimed to have tossed it into a pile of fan mail and and added, "We thought being offered the MBE was as funny as everyone else thought it was … We all met and agreed it was daft ... then it all just seemed part of the game we’d agreed to play."
John Lennon was quoted as saying "To start with, we wanted to laugh. But when it happens to you, when you are being decorated, you don’t laugh any more. (…) We had nothing to say. The Queen was planted on a big thing. She said something like ‘ooh, ah, blah, blah’ we didn’t quite understand. She’s much nicer than she is in the photos." Later on Lennon would elaborate... "She said to me, 'Have you been working hard lately?' And I couldn't think what we had been doing so I said, 'No, we've been having a holiday,'" Lennon recalled. "We'd been recording, but I couldn't remember."
Less than 4 years later, on September 1, 1969, John Lennon would return his MBE