TaxCorporate TaxHMRC wins tips battle

HMRC wins tips battle

Troncs do not count towards National Minimum Wage

Tips distribution schemes, or ‘troncs’, do not count towards the National
Minimum Wage, a court has ruled.

An Employment Appeal Tribunal ruled that, in the case of Annabel’s restaurant
and night club, employers have to pay their staff at least the minimum wage
regardless of any tips, gratuities, service or cover charges.

Denise Gaston of HM Revenue & Customs said: ‘Our priority is to ensure
that all workers are paid at least the National Minimum Wage. We are very
pleased that the court has recognised HMRC’s commitment to ensuring that tips
are correctly and fairly distributed to the people who earn them. This is good
news for bar and restaurant workers across the UK.’

A spokesperson for the Department for Business said: ‘It is essential that
all UK workers receive the pay they are entitled to and that everyone earns at
least the National Minimum Wage. Equally, it’s important that tipping is fair
and we are already examining what options are available to help ensure
transparency.’

Further Reading:

Read
the government’s press release

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