Do I Need To Pay Tax

[JBW1366]

Hello- I work as a barista for a hugely popular company. We get left tips by our loyal customers, the manager has told us that we can’t have them as we will need to pay tax on our share - is that correct. Instead she has offered a night out, using accrued tip money but surely that’s the same? What if I don’t want to go out can’t I then have my share? Any help as also gratefully received. Thanks

[iluvmargie]

That's news to me, never known tips to be 'taxed'.

[MartinMillar]

Cash tips paid directly to you
If you get cash tips directly from a customer, you have to pay tax on them but not National Insurance. ... HMRC will give your employer a tax code so they can collect tax through Pay As You Earn ( PAYE ). This is where tax is taken from your wages before you get them

[iluvmargie]

Things have changed since I worked as a barmaid some years ago. We just divided the tips up at the end of the night and took our share home.

[ABerrant]

iluvmargie - All tips received in whatever form are taxable income subject to income tax.

How the tip gets to the employee may result in different treatment in terms of PAYE, NIC or VAT but must always be treated as taxable income.

Tips are only tax-free if no one tells HMRC about them but that’s tax evasion and illegal and has been the case for decades (probably since the introduction of income tax to help finance the Napoleonic Wars)

[Peter Pedant]

there is a technical answer
and I think you need advice - try CAB
simply
o god of course it is income and you should pay tax on it. If it is direct to you then you declare it on your own tax form ( this is a public forum and so it is NOT right to say pocket it )
if it a tronc then the employer should deduct 20% and pass it onto you and the others

whatever the answer ( hence you need advice) a night out is NOT the answer as that is a benefit in kind and is also clearly income ( and I cant remember the tax position )

mgr should really know all this - hence the need for advice.

[bednobs]

are the tips valuable? If so wats up with receiving them and paying tax on them as an alternative?

[Peter Pedant]

erm sorry can we take this as a straight forward tax question?

[bednobs]

or be the one to clear the tables and put it in your sock

[Canary42]

I don't think providing meals as benefit-in-kind nullifies tax liability.

https://www.gov.uk/expenses-benefits-meals-employees-directors