The Queen has announced, on 14th October 2019, that the government “will take steps to make work fairer, introducing measures that will support those working hard”.
The new Employment (Allocation of Tips) Bill will ensure that 100% of all tips, service charges and gratuities will be handed to over to waiting staff.
Although the finer details are yet to be released, we understand it will require employers to distribute tips among workers on a fair and transparent basis.
This latest announcement comes 12 months after then-Prime Minister Theresa May said a ban on employers making deductions from tips would be introduced at the earliest opportunity, but failed to do so during her time in office.
We believe further details will be released in the 2019 Budget.
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A tronc – also refered to as troncs or tronc arrangements – is a special tax-efficient pay arrangement used to distribute tips and service charges to employees and a cost effective method motivation, incentivisation and reward. Usually administered by an independent Troncmaster (who must not be a director or owner), he or she decides how the money is distributed to employees.
Employees who receive service charge via a tronc are liable to pay income tax but benefit from a 12% Employees National Insurance saving. Employers also benefit from a 13.8% Employers National Insurance saving.
Jeffreys Henry LLP is one of the UK’s leading firms of Chartered Accountants with significant restaurant experience. We work with Michelin-starred restaurants, themed restaurant groups, individual bistros, gastro pubs and pop-ups.
We work with over 60 Michelin-starred restaurants, fine dining restaurants, themed restaurant groups, hotels, franchises, individual bistros, gastro pubs, bars and pop-ups. Some of our London based restaurant clients include White Rabbit Fund, Kym’s, Ottolenghi, the Coal Office (collaboration between Palomar chef Assaf Granit and designer Tom Dixon), Mildreds, The Urban Leisure Group, Tommi’s Burger Joint, Nightjar, Tom Conran Restaurants, Nuno Mendes, Callooh Callay, Sacro Cuore, Señor Ceviche, Kricket and others.
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