Revenue & Customs is facing a dispute over its claim to allow tips to be distributed through a tronc system to restaurant staff, which doesn't form part of their minimum wage. The tronc system, backed last year by the Employment Appeal Tribunal, involves one employee fairly distributing the amount of tips received to all the staff. It has come under fire by three employers who have taken their case to the Court of Appeal over being forced to pay extra to meet their employees' minimum wage entitlements. Annabels, George and Harry's Bar in London are appealing on the grounds that by law, all tips paid by credit or debit card and cheque become legally and beneficially owned by the restaurant proprietor. If the employer pays a corresponding sum direct to an employee, this sum counts towards the minimum wage obligation. But the taxman has argued and been backed by the EAT, that under the tronc system it is different because a troncmaster is employed to ensure all tips are fairly divided between staff. The EAT ruled that at the time such money is paid to an employee, it is held in a troncmaster's dedicated bank account and is therefore legally owned by him. Therefore it is not money paid by an employer to an employee as stated in the 1999 National Minimum Wage Regulations. The three London restaurant owners are debating this, saying that if this was the case then no employer bound by minimum wage would be able to pay its employees through the bank, as at the time of payment the bank would be the legal owner of the money. Revenue & Customs is maintaining that the monies paid through a tronc system are not paid by an employer to an employee under the 1999 Regulations, and that the EAT decision should abide.