Members in the restaurant industry, or with clients in that industry, should note the revised approach in Guidance E24 published in the week ending 27 October 2006.

The Guidance document now states, in Section 8:

A troncmaster is not required to pay NICs on payments made from the tronc. Where payments made from a tronc attract NICs liability, responsibility for calculating the NICs due and making payment to HM Revenue & Customs rests with the employer.

Payments of tips by the troncmaster will not attract NICs if:

• they are not distributing money that was originally paid to the employer and the employer does not pay the money directly or indirectly to his employees, or
• the employer does not determine, directly or indirectly, the allocation of those tips. (By this we mean the employer must not decide who should receive what amount by way of tips either directly or through any other person.)