Hospitality leaders write to Government to ask for tips to be added to furlough scheme

Some of the restaurant industries biggest names have called on the Government to include tronc, service charge, and tips in its furlough scheme.

The likes of Hawskmoor’s Will Beckett and Corbin and King’s Jeremy King said the exclusion of such pay awards has caused “real and serious hardship”.

The letter has been written by WMT Troncmaster Services and asks for the urgent reconsideration of the Job Retention Scheme rules.

The industry hopes the Treasury will address the gap in finances, with as many as 750,000 hospitality employees reportedly hit.

More than 50 restaurateurs and business leaders have signed the letter, including Des Gundewardena, chief executive and chairman of D&D London; Peter Borg-Neal, chief executive of Oakmann Inns; Adam Handling, owner of the Adam Handling restaurant group; Tom Aikens, chef-patron of Muse restaurant in London’s Belgravia; and Kate Nicholls, chief executive of UKHospitality.

All involved have praised the furlough scheme, but argued that the decision to exclude what it has called “discretionary payments” is based on a “mistaken understanding of how tronc systems operate”.

The comments come after Beth Russell, director general of tax and welfare at the Treasury, told MPs: “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.”

The letter asks Rishi Sunak to think carefully about the furlough scheme and to ensure people aren’t uneccessarily hurt.

It reads: “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.”

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