We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Tronc system and NI contributions
arciere
Posts: 1,361 Forumite
Company ABC operates in the restaurant industry. Such restaurants operate a 'voluntary service charge' policy, by which a fixed percentage is added to each bill automatically but the amount can be removed upon request before paying the bill.
Said company pays its employees a fixed salary. A percentage of this fixed salary is paid with the money coming from service charges through a Tronc system, with the Troncmaster being a person from the company's accounts department. It does this so that, after taxes, the salary earned by the employee will be the same, but the company will be saving a percentage as NI is not paid for the amount coming from the service charge (apologies but I didn't know how to make it clearer).
Is this all legal from an HMRC perspective?
Said company pays its employees a fixed salary. A percentage of this fixed salary is paid with the money coming from service charges through a Tronc system, with the Troncmaster being a person from the company's accounts department. It does this so that, after taxes, the salary earned by the employee will be the same, but the company will be saving a percentage as NI is not paid for the amount coming from the service charge (apologies but I didn't know how to make it clearer).
Is this all legal from an HMRC perspective?
0
Comments
-
I can’t see that your question has anything to do with welfare benefits and Tax Credits so this may not be the best place to post your query.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0
-
Apologies, is there any section of the forum more suitable?
No need to apologise, I was just concerned that those of us who frequent this forum may not be the best people to answer your question. There isn’t an obvious place but perhaps the Employment forum is more appropriate.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
Company ABC operates in the restaurant industry. Such restaurants operate a 'voluntary service charge' policy, by which a fixed percentage is added to each bill automatically but the amount can be removed upon request before paying the bill.
Said company pays its employees a fixed salary. A percentage of this fixed salary is paid with the money coming from service charges through a Tronc system, with the Troncmaster being a person from the company's accounts department. It does this so that, after taxes, the salary earned by the employee will be the same, but the company will be saving a percentage as NI is not paid for the amount coming from the service charge (apologies but I didn't know how to make it clearer).
Is this all legal from an HMRC perspective?
HMRC guidance
https://www.gov.uk/guidance/employee-gets-tips-gratuities-or-service-charges-through-a-tronc0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.4K Banking & Borrowing
- 254.1K Reduce Debt & Boost Income
- 455K Spending & Discounts
- 246.5K Work, Benefits & Business
- 602.8K Mortgages, Homes & Bills
- 178K Life & Family
- 260.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards