Where a tronc run independently of the secondary contributor,
(usually the employer), implements changes at the employer’s
request this may raise a doubt about the independence of that
tronc. Before reaching any conclusion about NICs liability
establish whether condition 2 of the gratuity disregard (
NIM02922) is satisfied. (Condition 1 of
the gratuity disregard (
NIM02921) will not be satisfied where
the amounts paid to the tronc comprise or represent sums paid by
customers to the secondary contributor). You should bear in mind
that
allocate means deciding
The employer does not allocate a payment to a particular earner merely because he asks the tronc and or its members to consider changing the rules.
Bruno and Antonio run a restaurant. The tips are paid through a
tronc run by Dino. The other staff elected him. He decides who will
participate in the tronc and how much each participant will get.
Dino has chosen to restrict tronc membership to those who have
worked in the restaurant for a minimum of six months.
Bruno and Antonio point out to Dino there are problems with
recruitment. They suggest Dino might consider extending
participation in the tronc but it is clear they do not impose
anything regarding the way Dino operates the tronc. Dino decides,
with staff approval, to allow all staff to participate in the
scheme.
Bruno and Antonio have influenced who shall participate in the tronc, but they have not determined how much each person receives. They are not directly or indirectly allocating the tips because Dino continues to determine who gets what. Therefore, in these circumstances no NICs are due on the tips distributed by the tronc.
