Back in 2019, Her Majesty The Queen announced 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 given to staff.
However, The Mirror states, “Even after this week’s announcement, no legal change is expected before next year at the very earliest.”
Most operators have a well-structured tronc that allows the Troncmaster to reward both front and back-of-house employees who all play a part in delivering an exemplary service to guests.
We understand the proposed changes would place a legal obligation on employers to pass on all tips, gratuities and service charges to workers without any deductions.
Tronc Benefits
A tronc is a special pay arrangement, used by many restaurants, bars and hotels, to distribute tips and service charge to employees in a fair and transparent manner.
It is usually administered by an independent Troncmaster (who must not be a director or owner). The troncmaster, along with a tronc committee, determines how the money is distributed to employees fairly. A correctly structured tronc also ensures monies paid to employees is taxed correctly.
Tax on Tronc
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.
FREE TRONC HEALTH CHECK
We provide a free, no obligation health check on your current tips, tronc and service charge arrangements. The health check identifies areas that may leave your current tronc arrangements invalid and areas that can be improved or streamlined.
MARK TENZER
Partner - Restaurant & Hospitality
BHIMAL HIRA
Partner - Restaurant & Hospitality
MELANIE GOWER
Payroll/Tronc Manager
RELATED TRONC AND SERVICE CHARGE NEWS
30 July 2021
There are a number of accounting tools that can be used by restaurants, bars and hotels to ensure that their financial operations are properly managed and used correctly. Financial tools provide real-time financial data which can help you capitalise on opportunities and plan better. Below is a list of some of the best accounting tools which we would recommend for your hospitality business.
1 June 2021
Between 1 April 2021 and 31 March 2023, companies can claim a super-deduction in the form of first year relief of 130% on qualifying plant and machinery additions. This means a company spending £100,000 on qualifying assets would have £130,000 deducted against its taxable profits, resulting in a tax saving of £24,700 per £100,000 of expenditure.
26 May 2021
The latest in our series of quick-fire client interviews, Jeffreys Henry speaks to Dan Anton, co-founder of Lahpet. Lahpet started life as a pop-up in the railway arches of London Fields by co-founders Dan Anton and Zaw Mahesh, before opening their first permanent site in Shoreditch in 2018. Lahpet remains one of London’s only restaurants to specialise in Burmese cuisine. Dan talks about the success of DIY kits during lockdown, how they prepared for indoor re-opening as restrictions eased, and opening their second and largest site in the midst of the pandemic.
25 November 2020
The latest in our series of quick-fire client interviews, Jeffreys Henry LLP speaks to Hannah Vernon of Urban Leisure Group. Hannah discusses how the second lockdown and tier restrictions impacted ULG’s performance, how government guidance for the hospitality industry has been unclear and the ways in which ULG have adapted their business model to the changing times.
18 November 2020
Research & Development (R&D) tax relief is often overlooked by food and beverage manufacturers, product developers, food scientists, and food clinical researchers.
28 October 2020
Yotam, who owns 6 restaurants in London, discusses how the new restrictions have been a hindrance to the recovery of the hospitality industry, what he believes the government should be doing to offer more support and where he sees the future of the industry.
23 October 2020
Rishi Sunak has announced new support measures for hospitality, accommodation and leisure businesses that fall under the Tier 2 coronavirus alert areas.
12 August 2020
Over 83,000 restaurants have now signed up for the government’s Eat Out to Help Out scheme, designed to protect jobs and boost sales in the hard-hit hospitality sector. In the first week alone, over 10.5 million meals were discounted, however, just how much is this helping the industry?
15 July 2020
On 8th July 2020, the Chancellor, Rishi Sunak, delivered a “mini-Budget” in response to the Covid-19 outbreak, announcing several measures to support the Hospitality & Tourism industry, such as VAT cuts and the introduction of the “Eat Out to Help Out” scheme. We have summarised the key announcements and action points.
