Government decision to exclude tronc from CJRS based on ‘completely mistaken assumption’

The government has been accused of basing its exclusion of tronc and service charge from the Coronavirus Job Retention Scheme on a “completely mistaken assumption”.

The comments were made after Beth Russell, director general of tax and welfare at the Treasury, told MPs: “The difficulty with tronc particularly is that in some cases tronc is notified to HMRC and in some cases it’s not, so if we included it there would be unfairness in that approach as well.”

Russell had been asked if the decision would be reassessed by Steve Baker, Conservative MP for Wycombe, who had been contacted by a hospitality worker who was receiving just 40% of his former earnings due to the exclusion.

She told the Treasury Select Committee: “We are generally taking an approach that discretionary payments are not included and obligatory payments are.”

However Peter Davies, managing director of WMT Troncmaster Services, told The Caterer: “It’s a completely mistaken assumption. Tronc systems by definition are formal things, the money gets paid through payroll, it is shown on employees’ pay slips, it gets taxed, it’s declared to Revenue and Customs through the RTI system and they already have all of this information.

“Nowadays the overwhelming majority of businesses pay and process the tronc money so that it’s on payroll, which is wholly in line with existing HMRC legislation and public guidance. The only money which is outside of this is by and large cash tipping and everyone accepts that that wouldn’t form a part of the Coronavirus Job Retention Scheme and therefore it does seem wholly inequitable to approximately 758,000 employees that their income in these difficult times is going to be artificially lower because of a misconception and we’d urge the treasury to look again at this.”

Guidance around the Job Retention Scheme, which sees the government cover 80% of furloughed workers wages up to £2,500 a month, confirmed tronc, tips and service charge would not be included at the end of last month.

Many industry figures have spoken out against the exclusion including D&D London chairman and chief executive Des Gunewardena, who told chancellor Rishi Sunak that the decision was "deeply unfair, discriminatory, and sends a clear message to restaurant staff in the UK that they are not valued”.

More than 24,000 people have also signed a petition urging the government to reconsider.