The Central London Employment Tribunal’s decision that discretionary service charges and credit card tips paid via the tronc are to be counted as paid by the employer, and thus a component of an employee’s wages for the purposes of National Minimum Wage (NMW) legislation, is to be appealed by HM Revenue and Customs (HMRC), according to a recent report.
If successful, HMRC’s challenge will make it necessary for employers to pay the NMW excluding the value of gratuities. The benefit to HMRC would be a greater Income Tax and National Insurance take due to the higher levels of basic wages which would have to be paid to some employees.
Reported in CatererSearch, 31 October 2007. See