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The Caterer

New Tronc guidance issued by HM Revenue & Customs

19 October 2006
New Tronc guidance issued by HM Revenue & Customs

HM Revenue & Customs has been accused of making a huge retreat over its new E24 guidelines on tronc.

Experts say the Revenue has conceded in effect that an employer can offer advice on how tronc is allocated provided the troncmaster is not the employer and the troncmaster freely decides how it is divided.

The Revenue has said only where staff are promised a specific amount of tips in their contract will tronc payments be hit with NIC.

Employers can also pay a salary rate less than the minimum wage and top it up with payments from the tronc, according to the new guidance.

Peter Davies, consultant at tax adviser Vantis said: "It's a retreat the likes of which hasn't been seen since Napoleon decided that Moscow in winter was somewhat chilly."

Discretionary service charges and non-cash tips still belong to the business and can be retained for credit card charges and breakages. The remainder constitutes the tronc and is therefore not subject to National Insurance contributions (NIC).

For an in depth analysis see Caterer next week or attend Vantis's free seminar on 31 October at 4pm at Bisham Abbey in Marlow, Buckinghamshire.

To register, send your name, business title, address and telephone number to or call Melanie Norris on 0118 974 8500.

In brief, the new guidelines state:

  • All money paid through the employers payroll and identified on payslips counts towards earnings for the minimum wage
  • National insurance will only be due if a specific contractual entitlement exists in respect of gratuities, or if an employer has directly or indirectly allocated the gratuities to their employees.

E24 Revised Guidelines >>

Unions blast new tronc guidelines >>

Tronc rules leave NIC loophole >>

By Emily Manson

E-mail your comments to Emily Manson]( Tronc guidance issued by HM Revenue and Customs) here.

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