A tronc is an arrangement that is sometimes used to distribute tips, service charges and gratuities among employees. They’re typically used in work settings where tipping is common, such as a restaurant, hotel or bar.
When tips are pooled together and shared equally amongst staff members, the person who controls the tronc, known as a troncmaster, is required to set up and run a payroll, as well as reporting the information to HMRC. HMRC must know who the troncmaster is, so that they can set up a PAYE scheme for the tronc.
Troncs are pretty straightforward to set up and implement. They work in the following way:
If you earn £2500 from other untaxed income, such as cash tips or renting a property, you will need to register and file a Self Assessment tax return.
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