Quarterly News

Tips and NMW

From October 2009, using tips to make up staff pay to the National Minimum Wage (NMW) levels has been outlawed whatever method is used to pay the tips.

It all began in June 2008 when HMRC won an Employment Appeal Tribunal against the restaurant/club Annabel's and others. The case involved the calculation of NMW pay where an independent tronc scheme was in operation. Troncs are a system of pooling and distributing service charges, tips and gratuities to staff in the service industries. Under specific circumstances, payments made as tips, gratuities, service charges and cover charges may count towards NMW pay. However HMRC argued that tips, gratuities and voluntary service charges paid to workers by a troncmaster via a tronc did not count towards NMW.

In 2009 the Court of Appeal confirmed this position, meaning that employers should be paying the NMW regardless of any tips, gratuities, service charges or cover charges that are not paid by the employer through the employer's payroll.

News Highlights

Plant capital allowances

Have you installed new 'plant' in a building used for the purposes of your trade recently? The read on.

Every pound counts

The AIA has now been increased from £50,000 to £100,000 in the Finance Act 2010.

• back |
• top