Under the CJRS, tronc payments will not be included in the amount paid to furloughed workers. Trade body UKHospitality (UKH) has urged the Government to rethink this because employees will get less money through the grant to get them through the coronavirus pandemic.
Chancellor of the Exchequer Rishi Sunak last month (Friday 20 March) announced the CJRS, which will cover 80% of the salary of retained workers, up to a total of £2,500 a month.
Incredibly disappointing
What is tronc?
A pay arrangement used to distribute tips, gratuities and service charges, which is run independently of the employer by a ‘troncmaster’.
PAYE tax is due on any gratuities distributed and the troncmaster is responsible for calculating and deducting this.
UKH chief executive Kate Nicholls said: “It is incredibly disappointing the Government has seen fit to exclude tronc payments from people’s earnings.
“HMRC will have evidence employees are paid tips through a tronc so there seems to be no reason not to include it in the CJRS.
“This is a taxable income that team members have earned. Excluding it from the scheme means furloughed employees will receive less money to see them through this crisis. Money they should be entitled to.”
Nicholls went on to say hospitality employees put in a huge amount of hard work to earn their tips, including often going above and beyond the expected service so customers have a fantastic experience.
Unnecessary pressure
She added: “At such a difficult time for the country, people’s hard work should be acknowledged and those people should be supported. Not doing so only risks putting additional unnecessary pressure on the welfare system.
“Hospitality businesses are doing their best to support employees during extraordinarily difficult times.
“But with zero revenue and persistent demands on cash from landlords and others, there is only so much they can do.
“Including tronc payments in the CJRS would give more people some much-needed support and we hope the Government reconsiders.”
