Letter demanding tronc inclusion in JRS receives sector-wide support

By James McAllister

- Last updated on GMT

Letter demanding tronc inclusion in Coronavirus Job Retention Scheme receives sector-wide support

Related tags: Coronavirus, Job Retention Scheme, Government

Restaurateurs including D&D London CEO Des Gunewardena and Hawksmoor founder Will Beckett have signed a letter to Chancellor Rishi Sunak demanding the inclusion of tronc payments in the Government’s Coronavirus Job Retention Scheme (JRS).

The letter, written by WMT Troncmaster Services managing director Peter Davies, says that the decision not to allow tronc to be included in an employee’s calculated earnings means the pay-packet for furloughed hospitality staff can be as low as 55% of their usual salary. 

Under the JRS, employers are meant to be able to claim 80% of a employee’s monthly wages up to £2,500. 

The subject of whether tronc payments could be included in an employer’s calculations was a notable grey area in the build-up to the JRS portal going live last month, but updated Government did eventually confirm​ that it could not be claimed. 

While Davies acknowledges the unprecedented support provided to businesses and the economy through the JRS, he says that as a result of tronc not being included in the scheme, some 750,000 hospitality employees are receiving ‘significantly less’ than 80% of their earnings.

He adds that he believes the approach is based on a mistaken understanding of how tronc systems operate, citing comments recently made by the Treasury’s director general of tax and welfare Beth Russell.

Speaking before the Commons Treasury Select Committee last week, Ms Russell said: "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.”

In the letter, Davies remarks that the overwhelming majority of customer gratuities these days are paid by card, and are therefore subject to tax deductions. 

He also notes that under the Government’s furlough scheme for self-employed workers, tips are eligible within the limits of the support offered.

“It seems inequitable that the self-employed will have declared tips taken into account when calculating support, but employees on PAYE will not have their declared tronc awards treated in the same way,” writes Davies.  

"For most hospitality employees in the most successful businesses, tronc can form anything up to 40% of their earnings. It is declared and taxed and, nowadays, counted as earnings by banks and mortgage providers. 

“The decision to exclude these payments means that hospitality employees, through no fault of their own, are receiving furlough pay of 40% to 60% of their earnings rather than the 80%, which they expected and which those in other sectors of the economy are receiving. 

“This is causing real and serious hardship and the universal credit is not an adequate remedy.”

The letter has more than 50 other co-signatories from across the industry.

They include UKHospitality chief executive Kate Nicholls; chef Adam Handling; Lussmanns Restaurants founder Andrei Lussmann; chef Tom Aikens; and the Hakkasan Group’s director of human resources Nina Lam.

Related topics: Business & Legislation

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