Our thoughts: Government postpone legislation regarding tips.

Buzzacott’s Head of Troncmaster Services, Mark Taylor, offers his thoughts on the latest announcement regarding the government’s plan to legislate how tips are paid to restaurant employees.

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Mark Taylor

+44 (0)20 7556 1243

In October 2018, the UK government announced that legislation will come into force to ensure that tips left for workers will go to them in full. This would prevent restaurants from taking deductions from tips paid by credit and debit card. This action follows a government consultation in 2016, on tipping, gratuities, cover and service charges of which no findings have been published. The consultation arose because it was revealed that many high street restaurant chains were withholding up to 10% from tips paid by credit and debit card.

Following the announcement late last year, it has now been revealed that the government will once again push back plans to legislate restaurant tipping with action unlikely to be taken until the next parliamentary session.

If action is taken, the hospitality industry should not fear these changes. Most are willing to actively address a major concern for workers in the hospitality industry, around the engrained lack of transparency regarding what happens to the money that is tipped to staff by customers. It is accepted that when customers are generous enough to tip servers, it is to reward restaurant staff and show their overall satisfaction with their dining experience. The problem for the hospitality industry is finding the best way to do this, that is ethical and fair, and show their commitment to their employees.

How can we help?

At Buzzacott, we help businesses in the hospitality industry champion giving their employees a fair share of tips - what better way to show this than with a clear and fair tipping tronc system?

A well-considered tronc scheme lets staff have up to 100% ownership of tips that are shared out in a way that’s fair, transparent and free of bias.

Furthermore, having an independent tronc scheme helps businesses conform to HMRC requirements, qualifies for exemptions from National Insurance, helps staff feel valued increasing their likelihood to stay with a business and allows transparency so all the relevant stakeholders know who and what amount is being tipped.

For further information regarding tronc schemes or the article above, please contact Mark Taylor on +44 (0)20 7556 1243 or alternatively, please complete the form below:

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You might also be interested in… Running a Tronc scheme.

One of the main challenges of any business in the hospitality, leisure and service sectors is how to fairly and ethically distribute tips, gratuities and service charges voluntarily given by customers to staff. We can help you to take out the hassle of this compliance task and by doing so lower staff turnover and provide a motivated, productive workforce who take home more pay at no increased cost to you.

What is Tronc?
A Tronc is a special pay arrangement that lets you fairly distribute staff tips, gratuities and service charges given by customers. You can save a great deal of time, money and hassle by using Buzzacott as your independent Troncmaster.

What are the benefits of having an independent Troncmaster?
• Up to date knowledge of HMRC powers and rules;
• Conform with HMRC requirements and exempt from National Insurance;
• Fair, transparent and ethical;
• Free from employer influence or favouritism and run for the benefit of staff ;
• Staff can get 100% ownership of hard-earned tips, plus a say in how they’re shared out;
• Staff feel valued and rewarded so less likely to move on; and
• Staff and customers can refer to formal rules to allocate and distribute service charges.

*In case you’re wondering, the word stems from the 1920s French term tronc des pauvres –  a collection box for donations to the poor. 

There are some 150,000 businesses in the UK where tipping is common, but the practice is far from transparent. So what’s the solution? How can businesses in the hospitality, leisure and service sectors distribute tips fairly and transparently? Many employers decide to distribute gratuities by adding it to the general payroll. But there’s a drawback: the extra is often taxed as salary, meaning the staff receive it net of Income Tax and National Insurance Contributions (NICs). Enter an alternative option, one which benefits all: Troncmaster schemes.

Watch our video below on how a Tronc scheme works, and how it can help your business.