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.