EIM07900 - Employment income: tips and gratuities: troncs
Section 62 ITEPA 2003
Tips and gratuities received by taxi drivers, postmen, hairdressers, waiters, etc, in respect of services they have provided are taxable as earnings within section 62 ITEPA 2003 (see generally EIM00520 onwards).
In Calvert v Wainwright (27TC475) a taxi driver employed by a taxi hire company was held to be chargeable in respect of tips he received. Atkinson J said:
바카라 사이트淭ips received by a man as a reward for services rendered, voluntary gifts made by people other than the employers, are assessable to tax as part of the profits arising out of the employment if given in the ordinary way as a reward for services.바카라 사이트�
An employee may claim their tips are not chargeable because they are 바카라 사이트榩ersonal gifts바카라 사이트�. But when a tip is given to an employee personally that only means it is given to them for their own benefit and not for that of the employer. It is only a gift that is given on personal grounds that is not chargeable. That is because it is not then 바카라 사이트榝rom the employment바카라 사이트� (see EIM01450 and EIM01460).
A tip taking the form of goods will not qualify for exemption under section 324 because it is a payment in recognition of services performed (see EIM21715).
Troncs
In the catering industry, tips are sometimes distributed by a 바카라 사이트渢roncmaster바카라 사이트�, who is responsible for operating PAYE. Detailed guidance on troncs is provided in the PAYE Manual - search for 바카라 사이트淭ips, Gratuities, Service Charges And Troncs바카라 사이트�.