Compliance isn’t a one-time setup — it’s an ongoing discipline. Use this checklist to ensure your TRONC scheme remains fully compliant and your NI exemption stays protected.
The Compliance Checklist
Scheme Setup
- TroncMaster appointed in writing with a formal letter of appointment
- TroncMaster is genuinely independent of the employer
- Separate TRONC PAYE scheme registered with HMRC
- Written TRONC policy document exists and is available to all employees
- Distribution rules are documented, agreed, and communicated to staff
- Employee records include eligibility status, job role, and start date
Ongoing Operations
- Daily/weekly TRONC amounts are recorded with breakdown (cash, card, service charge)
- Distributions are processed regularly (at least monthly as required by the 2023 Act)
- Each distribution is previewed, reviewed, and approved by the TroncMaster
- Full audit trail maintained — who distributed what, when, and to whom
- Any manual overrides are flagged, documented, and approved by the TroncMaster
- Income tax is correctly deducted via the TRONC PAYE scheme
- Payroll exports clearly separate TRONC amounts from regular wages
Record-Keeping
- Retain records for at least 6 years (HMRC requirement)
- Records include total tips, distribution calculations, and individual allocations
- Rule change history with dates, old rules, and new rules
- TroncMaster appointment and independence documentation on file
- Employee acknowledgements of the TRONC policy on file
- HMRC correspondence and PAYE submissions archived
Red Flags That HMRC Will Investigate
The TroncMaster changes at the employer's request and new appointee follows the same instructions
Evidence of employer control — NI exemption at risk
Tips are used to top up wages to meet minimum pay requirements
Tips become part of employment earnings — NI and minimum wage violation
No written TRONC policy or outdated documentation
Cannot demonstrate compliance — HMRC may default to employer-controlled treatment
Distributions don't match the published rules without documented justification
Inconsistency suggests the rules aren't genuinely followed
Large gaps between tip collection and distribution
Breach of 2023 Act requirement to distribute within the following month
The TroncMaster is the business owner's spouse, partner, or family member
HMRC will question genuine independence
What Happens if HMRC Investigates?
If HMRC determines your TRONC scheme is not genuinely independent:
- All TRONC distributions may be reclassified as employer-directed payments
- Employer NI at 13.8% becomes payable — potentially backdated up to 6 years
- Employee NI may also be recalculated
- Interest on unpaid amounts accrues from the original due dates
- Penalties may apply if HMRC considers the scheme was deliberately mis-structured
How Rocket Tronc Protects You
Every feature in Rocket Tronc exists to make compliance automatic, not optional:
- TroncMaster Mode enforces independence at the system level
- Every action is logged with timestamps, user identity, and role
- Compliance dashboard surfaces warnings before they become problems
- Distribution previews prevent accidental errors
- Immutable records — once distributed, records are locked and cannot be altered
- Written policy generator creates your compliant TRONC policy instantly
- Separate payroll exports ensure TRONC amounts are correctly reported