Let Dataplan handle your Tronc scheme

Tips, gratuities and service charges have always been part of the hospitality sector and often a way that employees can supplement their earnings. Recent cases of unfair practices with large restaurant chains has lead the government to put a spotlight on this practice in an effort to ensure tips are distributed fairly to employees.

So what does this have to do with payroll?

We have increasingly become involved in this area due to the way some businesses are trying to manage tips and also because tips are subject to tax.

If these tips are collected by the employer and paid out in wages they are also subject to NI and PAYE. There is a potential interplay between VAT, corporation tax, PAYE, NI and Pension contributions and the cost of getting it wrong can be significant, even when employers are trying to do the right thing.

For a more involved explanation of this area, read our blog on our hospitality website.

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The Dataplan Tronc Service

A Tronc is a special arrangement with HMRC where the employer does not control the allocation of tips. Instead it is decided by an appointed Troncmaster, who is responsible for collecting, distributing and accounting for PAYE on tips.

Tronc schemes offer significant benefits to both employers and employees and a scheme that has been correctly set up and administered will address many of the high-risk practices, the government is trying to stamp out such as pooling tips, tips paid on cards not going to staff and tips being paid through salary payroll.

How we can help?

This is a highly complex area and we have in-house expertise in this area.

We have a number of options including:

  1. Consultancy
    We can advise on your current practices and advise on the tax implications of your tip handling process. We can then offer advice on how improvements could be made
  2. Manage your Tronc Scheme
    For our payroll clients, we can act as your Troncmaster, managing your existing Tronc scheme.
  3. Set up a new Tronc Scheme
    If you decide to set up a Tronc scheme, we can advise you and set up the scheme for you, ensuring it is fully HMRC compliant. This would include setting up the Tronc Constitution, advising on distribution of tips policy and setting up the Tronc PAYE
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Check out our specialist Troncmasters service

With our expertise and experience in advising and processing tronc schemes, we have set up a dedicated tronc service called Troncmasters.co.uk that can offer not only advice but also help you set up the best scheme for your organisation, act as your Troncmaster and even pay out staff tips through a PAYE scheme.

Visit our Troncmaster website

If you would like to find out more about Troncs and how you can fairly and tax-efficiently manage tips and gratuities, please contact us and we will give you a call back to discuss

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