§ Mr. Roweasked the Chancellor of the Exchequer under what powers the Inland Revenue requires answers from employers to its standard letter concerning gratuities received where the employer is not the troncmaster.
§ Mr. Moore[pursuant to his reply, 1 March 1984, c. 273]: If a tronc is in operation and the employer is not the troncmaster, inquiries concerning tips would normally be made to the troncmaster. However, if the troncmaster has failed to operate PAYE, the Commissioners of Inland Revenue have power to direct the employer to operate PAYE on tips paid to the troncmaster through the employer.
§ Mr. Roweasked the Chancellor of the Exchequer (1) if, where the actual tips received and declared by an individual are different from the standard amount which the Inland Revenue considers it may be expected to have received, it is the policy of the Inland Revenue to assess the actual amount received and not the amount the Inland Revenue considers to be the standard;
(2) what is the policy of the Inland Revenue on altering employee codings in respect of gratuities where information on the level of gratuities is not forthcoming and the employer is not the troncmaster.
§ Mr. Moore[pursuant to his reply, 1 March 1984, c. 273]: The amount of tips declared by the individual is accepted unless the Inland Revenue has reason to believe the figure is inadequate. In the absence of satisfactory information on the levels of tips, the Inland Revenue estimates the amount to the best of its judgment. An employee can appeal against a PAYE code or assessment if he considers that any estimate of tips included is excessive. A code will be adjusted if a better estimate can be agreed. If an appeal is made, an assessment will be adjusted to show the actual amount when that information is provided.
§ Mr. Roweasked the Chancellor of the Exchequer what is the reason for, and the scope of, the investigation of the tips received by employees in hairdressing salons which is being conducted by the Inland Revenue.
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§ Mr. Moore[pursuant to his reply, 1 March 1984, c. 274]: Tips received by employees in the course of their employment are taxable as emoluments. Employees receiving tips must show the full amount received in their income tax returns, whether or not they are received through a tronc scheme. It is the duty of the Inland Revenue to satisfy itself as to the accuracy and completeness of tax returns and to take steps to recover any tax that should have been deducted by employers or tronc masters. Investigations are generally conducted by local tax offices or by local PAYE auditors although where an employer has a large number of different establishments the matter may be handled centrally by a special office.
§ Mr. Roweasked the Chancellor of the Exchequer if he will publish what the Inland Revenue considers to be the likely amount of tips that various grades of hairdressing employees will recieve according to the status of the salon in which they work and what is the basis on which the Inland Revenue have arrived at those numbers.
§ Mr. Moore[pursuant to his reply, 1 March 1984, c. 274]: No central guidance on this matter has been issued to inspectors of taxes who exercise their judgment in the light of individual circumstances. It is open to an employee who disagrees with the amount determined by an inspector to appeal and, where agreement cannot be reached, the matter may be heard by the commissioners, who are an independent tribunal.