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Annabel's appeals against tronc ruling

25 June 2008 by

The private members' club at the heart of the battle over staff tips has started official appeal proceedings, after the tax man won an important victory earlier this month.

Annabel's in London is contesting a decision last week that saw HM Revenue and Customs (HMRC) overturn a key decision by an employment tribunal last September regarding staff wages.

The long-running case looked at whether or not tips paid to employees via a pooled "tronc" system counted towards the national minimum wage (NMW).

HMRC claimed some workers at Annabel's in Mayfair had not received their NMW entitlement because money from tips had been paid to them directly by the troncmaster, rather than the employer, and could not therefore be used in this way.

This interpretation of tax law was upheld by the employment appeal tribunal's decision last week.

However, Peter Davies from business advisory firm Vantis, which is representing Annabel's, said at the time decision would not have major ramifications for hospitality operators.

"The majority of businesses that deal with tronc will be unaffected by this decision, as they will not be running their tronc in this particular, old-fashioned way," he said.

Davies added: "Any businesses who are currently under enquiry by HMRC's National Minimum Wage teams, and are facing renewed demands based on the employment tribunal's judgement, should therefore be putting matters on hold pending final outcome."

For more see our tronc round-up >>

HMRC appeal over NMW tronc payments will affect few businesses >>

Taxman pounces on swipe-card subsidised staff meals >>
Time for the industry to come clean over tipping >>

By Chris Druce
E-mail your comments to Chris Druce here.

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