A Treasury Select Committee report has said the government must amend the Coronavirus Job Retention Scheme (CJRS) to include tronc payments made via PAYE.
Payments made to employees through a PAYE tronc system – for example, employees whose tips are collected electronically and included in their pay slips – are not considered as wages in an employee's furloughed pay calculations, despite these payments potentially making up a significant proportion of regular reliable income and being subject to income tax.
The committee published today the unanimously-agreed interim report, 'Gaps in Support', as part of its inquiry into the economic impact of coronavirus.
Commenting on the report, MP Mel Stride, chair of the Treasury Committee, said: "The chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.
"Overall, he has acted at impressive scale and pace. However, the committee has identified well over a million people who – through no fault of their own – have lost livelihoods while being locked down and locked out of the main support programmes.
"If it is to be fair and completely fulfil its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps."
Analysis by software provider Fourth found that, on average, tronc payments make up more than a quarter of hospitality workers' basic pay, meaning many will already be receiving 60% of their normal take-home amount, rather than the 80% intended by the CJRS.
MPs from across political parties have supported calls for tronc, service charge and tips to be included in furlough pay and agreed to lobby chancellor Rishi Sunak.
Industry leaders, including Hawksmoor's Will Beckett and Jeremy King of Corbin & King, signed a letter to government saying the exclusion of tronc, service charge and tips in furlough pay has caused "real and serious hardship".