The government has clarified employers cannot include tronc when claiming under the Coronavirus Jobs Retention Scheme (CJRS), leaving many employees out of pocket.
Employers have been keen to learn whether common funds for shared tips and service charges, known as “tronc”, would be included in furlough wage calculations ever since the Job Retention Scheme was launched in late March.
However, updated HMRC guidance (April 24) states that employers could not include payments made at the discretion of the employer or a client when calculating wages. This included any tips, including those distributed through tronc, optional bonuses and optional commission payments, as well as non-cash payments, non-monetary benefits, such as a company car, and salary sacrifice schemes, including pension contributions.
Jonathan Downey, co-founder of London Union, which operates Street Feast markets, said on social media the latest news was “disastrous for people working in hospitality, many of whom earn half of their pay through tronc. This cannot be what the JRS intended to exclude and government has made a mistake here.”
Andrew Ball, apartner at sector accountancy firm haysmacintyre, said: “While technically the tronc is made at the discretion of the troncmaster not the employer, I think this is pretty black and white. I’m sure there will be continued lobbying to get this changed but this is disappointing news. It is unclear what those who have already claimed tronc via the CJRS are required to do – hopefully there will be some guidance on this in the coming days.”