It is that time of year again: club members will have received - or will imminently be receiving - the annual Christmas appeal for the staff fund. This post seeks to explain more about that.
The origins of the Christmas appeal
The Christmas appeal is a long-standing practice in clubs, dating back to the late 1850s. It is a form of tipping at the end of the year, even though many traditional London clubs shun day-to-day tipping.
Tipping itself is a practice dating to the Middle Ages and the era of serfdom, with masters rewarding their servants for good performance. It became more common from the Tudor era, though did not evolve into its modern form until the 1850s as well.
In their earliest form, clubs did not originally allow any tipping - indeed, servants caught accepting a tip from a member could be grounds for instant dismissal on the spot. The rationale given for this was rooted in the private nature of clubs, and how the staff’s pay was raised by subscription - they were regarded as being akin to servants in a private house, and it was argued that such servants do not take tips from anyone other than their master, to whom they owed their allegiance. (This was somewhat confusing, as technically all the members were collectively their “master” - but the idea was to stop certain members from currying favour with staff by tipping more handsomely than other members.) And their status in these early clubs was typically as “servants”, and not as “staff.”
19th century wages for club staff often remained paltry, except when staff had equity in the running of the Club - as in the early proprietary clubs, where the manager, steward and proprietor roles might all be rolled into one, in one individual fulfilling all of these roles. But for most club servants, pay was low, and accepting tips was risky.
Attitudes in clubs began to change after Prince Albert helped popularise the celebration of Christmas in the UK from the 1840s. Ironically, it had relatively little to do with Christmas as a Christian festival. There grew an increasing sense of “the festive season”, both as an elite activity among high society, and as something widely communicated across society more generally - for instance, Charles Dickens published A Christmas Carol in 1843. It was against this backdrop of Christmas as the season of giving, and the appearance of Christmas appeals by hospitals and poor-houses in the mid-1850s, that the first Clubland Christmas appeals appeared in the late 1850s. These were among the military clubs of London, such as the United Service Club and the Junior United Service Club. These could be some of the worst-paying London clubs of the time. Several newspaper articles in 1859 testified to the recent emergence of this practice.
Meanwhile, as tipping became more common from the 1850s, in popular culture on both sides of the Atlantic, clubs resisted extending tipping any further, arguing that the annual Christmas appeal was in lieu of tipping their staff throughout the year. This has not prevented arguments raging since the 1950s on whether tipping should extend to a particular club.
One practice was once common in 19th and 20th century clubs - that of posting to the notice board a rapidly-updated list of the names of those members who have responded to the Christmas appeal so far. Since the list could be used by members to fairly quickly deduce any conspicuous omissions, it effectively doubled as a “naming and shaming” list, of those well-known members not included.
Tronc schemes
In England, clubs often (though not always) run their Christmas appeal through a tronc scheme. To quote HMRC’s own guidance on a tronc scheme, run by a troncmaster:
Tronc
A tronc is a special pay arrangement used to distribute tips, gratuities and service charges.
Troncmaster
A troncmaster is the person, other than the employer, responsible for arrangements to share tips among employees.
Troncs have one noticeable advantage for the employee. While they are liable to normal PAYE taxes such as income tax, they are not liable to National Insurance Contributions (NICs) from either employer or employee. This means that in effect, their payments attract a slightly lower rate of taxation than other payments that would be made to an employee. For a member, this can be an added incentive to give generously through the Christmas appeal, in knowing that staff will be able to keep more of their donation - though there is nothing to stop a tronc being used to distribute tips more generally around the year, quite aside from the Christmas appeal, and offering this same benefit.
For a tronc scheme to be valid, any tronc set up after 6 April 2004 needs to be registered with HMRC, and the troncmaster is responsible for ensuring that the correct PAYE tax is paid on the sums handled. As HMRC’s guidance makes clear, it needs to be run by a member of staff other than the employer. (Staff typically elect a troncmaster for the year, just as they might elect a trade union representative - though the thankless task of calculating PAYE means that there is often only one candidate.)
The nature of the tronc scheme can vary significantly from club to club. Some troncmasters prefer to hand out all their tips at Christmas time (including any delayed disbursement of late contributions from the previous year); others prefer to make payments staggered throughout the year, to supplement staff wages. Some prefer to give all staff an equal share in tips; others have complicated formuli depending on the role of individual staff. (There are clubs that prioritise member-facing staff, and there are clubs that prioritise behind-the-scenes staff, in their respective tronc distributions.)
Members might typically be contacted by an annual Christmas appeal letter from the troncmaster, rather than from the Club Secretary or the Club Chairman - although it is traditional for the Club Chairman to contact members at the same time (often in a separate letter enclosed in the same physical mailing), commending the appeal to members, and urging generosity and gratitude towards the staff.
Tipping in clubs
While it is the case that the Christmas appeal is traditional, it is not true that clubs are a tipping-free zone. Since the 1950s, a number of traditional London clubs have abandoned the “Christmas appeal” model, in favour of allowing tipping all through the year. This has tended to be the case in the clubs with larger memberships, and is the norm in most newer clubs.
However, the practice tends to be strenuously resisted in the smaller, more traditional clubs, on the grounds already outlined - that the Christmas appeal is supposed to replace year-round tipping.
The future of the Christmas appeal
The future of the Christmas appeal is by no means certain.
The absence of tipping can make clubs less competitive in the take-home wages of their staff. This may be particularly felt, due to acute staff shortages across the hospitality sector more generally, but especially after Brexit and Covid, which have also impacted clubs in recent years. Clubs with a large number of long-term staffers have tended to be more insulated from this; but clubs with higher staff turnovers or more recent recruitment of key roles have had real challenges due to this.
The tronc scheme does offer a tax advantage to staff - albeit a fairly modest one. And it should also be borne in mind that not all clubs operate their staff funds as a tronc scheme (and therefore their staff do not necessarily enjoy this advantage).
The elephant in the room, however, is not around marginal rates of tax, but on the sums raised at Christmas often being quite modest in the first place. It is common for Club Chairman/President to urge their members to donate a sum equivalent to a year of tipping, commensurate with their use of the clubhouse. It is less common for the sums raised from members to reflect this. Typically, a small minority give generously; many of the donations are only token amountsl while a sizeable number of members do not give (and never give) at all.
It is also not clear whether effectively “naming and shaming” members through posting the up-to-date list is entirely compatible with modern data protection law. One could see a case being made that a member’s privacy is being breached through such a posting; while one could also see a successful defence from a club on the grounds of a lawful basis for procesing data. There has never been a test case on this point, though risk-aversion has led a number of clubs to quietly discontinue the practice of posting the names of members who have donated so far.
All this means that the exact future shape of tipping and Christmas appeals in clubs remains ambiguous. That said, it is far more common for the Christmas season to see spontaneous outpourings of appreciation from members to staff - indeed, I saw a rather touching example of it only last night, in a well-known London club.
You can view the full and varied backlog of Clubland Substack articles, by clicking on the index below.
Index
Articles are centred around several distinct strands, so the below contains links to the main pieces, sorted by theme.