Don't thank us – just join up
Imagine you are opening your post one morning and you find a stern brown envelope from the Inland Revenue. You open it, safe in the knowledge that your PAYE is up to date, your self-assessment form was filed on time and that P11Ds aren't due for another six months.
It is a demand for £317,000.
Your reaction is that it must be a mistake. You've had an inspection and everything was approved and agreed.
You telephone the tax office. It isn't a mistake. It is a bill for National Insurance on tips divvied out through your staff's tronc scheme, backdated over the past six years.
This isn't a joke and it isn't a bad dream. This could have happened to you if we hadn't got wind of the plan and contacted the powers-that-be at the Inland Revenue before it was allowed to gather steam.
I am not trying to make Her Majesty's Inspectors of Tax out to be the bad guys. They are just doing their job by trying to plug any perceived loopholes in the collection of tax and NI. However, until we explained matters, they did not realise the damage that would have been inflicted on the restaurant industry, already reeling from foot-and-mouth and 11 September.
To them, this was a paper exercise to correct an anomaly. For many restaurateurs, it would have meant financial hardship, even ruin.
Our financial advisers, Wheawill & Sudworth, calculated that the bill for a restaurant turning over £1m a year would be in the region of £317,000.
However, following several months' patient lobbying, the Inland Revenue has decided not to push ahead with its NI recovery plan. Instead, it is working with us to publish a Good Tronc Guide.
While this threat has receded, it should act as a wake-up call to operators who are not yet members of a trade association. If bodies such as ours had not been here, had not been active and had not been vigilant, you could have been many thousands of pounds poorer.
Membership of a trade body may not seem important when you are facing the day-to-day problems of running a restaurant, but it is a kind of insurance policy.
Every week, trade associations are on the phone and in meetings with Government officials, trying to protect their members against further damaging legislation and time-consuming bureaucracy. Individual operators cannot hope to keep abreast of all these proposals, let alone lobby effectively against them. The only way is to band together.
So, next time you are wondering whether to join or renew your membership of a trade body, bear in mind that envelope from the Inland Revenue.
It could have been you.
IAN McKERRACHER is chief executive of the Restaurant Association
