Another week, another bit of egg on face for the beloved taxman.
After much delay and following extensive revision, the last ambiguity (hopefully) in the taxman’s reissued guidance on tips from last October has been cleared up.
Thanks to the sizeable balls of one unnamed London restaurant group with able assistance from financial advisory firm Vantis, the practice of topping up staff pay to make or exceed the minimum wage but from a separate tronc payroll to the main wage payroll has been judged perfectly legal.
It’s good news for the industry as it means a host of restaurants in line to be pursued for not paying the minimum wage by the Revenue if the decision went its way are now in the clear and can get on with what they do best, namely running a restaurant and feeding and looking after guests.
Also, from employees’ points of view there’s no change, they won’t earn less as a result of the decision – staff in this particular case were not being ripped off by their employer and were receiving a wage above minimum – which makes the taxman’s blinkered pursuit of the case on the grounds of enforcing the National Minimum Wage absurd.
But Kitchen Rat has found a loser in all this. The restaurant group in question has achieved a somewhat pyrrhic victory as it has been left with legal costs of £30,000, which can’t be claimed back as the hearing was a tribunal. Apparently the Revenue was after £150,000 but thirty grand is thirty grand and the taxman, essentially the villain of the piece here, is likely better placed to absorb such high costs.
Conducting business in the UK it seems remains a costly undertaking.