HMRC have issued revised guidance on the treatment of tips
and troncs. This issue has been the subject of debate for
some time with HMRC changing their guidance. Part of their
recent attack was aimed at troncs, schemes operated by employees
(and not the employer) to collect and distribute tips to
other employees and, in particular, the National Insurance
Contributions (NICs) due on tips distributed through troncs.
HMRC now appear to have backed down and have amended their
booklet, E24, Tips, Gratuities, Service Charges and Troncs,
to make changes to the section on the NICs due on tips and
gratuities.
The booklet had advised that if the contract of employment
indicated that the employee would be able to participate
in the tronc, any payments made by the tronc were liable
for NICs because they were contractual payments. HMRC now
accept that these sorts of payments are to be disregarded
from earnings and are not liable for NICs provided that the
employer is not allocating, directly or indirectly, the tips.
It is important to make sure that you are complying with
the current guidance as you do not want to be paying expensive
NICs unnecessarily.
Internet Links:
For HMRC’s amended tips
and troncs advice and HMRC booklet E24
|
