Your business could be giving HMRC 13.8% of the value of your employees tips when you don’t need to!
Your staff work hard to deliver a fantastic service and the tips they receive from your customers recognises their hard work. So why should these tips attract National Insurance, costing your business and deducting tax from your employees? Morally it shouldn’t, but if you are processing tips through payroll without using a tronc scheme, then this is the reality.
A tronc scheme makes sure the money goes where your customers intended it to.
– The business is not charged Employers NI (13.8%) on the value of the pooled tips
– Employees only pay income tax on the tips without the double whammy of 12% NI deductions too
