The recent announcement by business secretary Sajid Jarved that he intends to take a serious look at the issues raised when restaurants distribute tips to their staff came about following reports that some restaurants deduct an administration fee from the tip before it is paid over to the employee. On the face of it the practice would appear wrong and as a result many accused restaurant owners of cheating low paid employees. But is this fair or are there other factors to consider?
Could it really be that the taxman is skimming off the tip and not the restaurant owner? The tax and NICs legislation on tips is not that straightforward at all.
Taking income tax first there is no argument that tips are taxable but the tax is collected differently depending...
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The recent announcement by business secretary Sajid Jarved that he intends to take a serious look at the issues raised when restaurants distribute tips to their staff came about following reports that some restaurants deduct an administration fee from the tip before it is paid over to the employee. On the face of it the practice would appear wrong and as a result many accused restaurant owners of cheating low paid employees. But is this fair or are there other factors to consider?
Could it really be that the taxman is skimming off the tip and not the restaurant owner? The tax and NICs legislation on tips is not that straightforward at all.
Taking income tax first there is no argument that tips are taxable but the tax is collected differently depending...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")