A new nationwide survey has revealed that the most generous tippers are in the South West with a fifth happy to tip 20% of the bill, whilst nearly half of those in Yorkshire would only consider paying a 5% tip to waiting staff and one in seven in the North East never tips at all.

The survey of 1,000 people, was conducted by Perrys Chartered Accountants to highlight tipping culture in the UK.  It revealed that nearly 8 out of 10 people don’t think it is fair to pay a restaurant service charge, and would prefer to tip individual waiting staff for their work instead.

Tipping and service charges in restaurants in the UK can cause confusion for diners, with many assuming that serving staff get the full share of tips, whilst others worry that unless they leave cash, the staff won’t receive the money.

In October, the government announced plans to legally bar restaurants from taking any share of the tips after it was revealed that many large chains still routinely took a percentage of tips paid by credit and debit cards.

This followed a successful campaign by Unite the Union exposing chain restaurants for keeping hold of staff tips or taking them away from one group of low waged workers and giving them to another, instead of paying them all a wage they can live on.  They advised consumers to keep the pressure on and help end the scam by insisting on leaving tips in cash.

However, receiving cash tips isn’t always a straightforward affair for waiting staff.

Alex Skinner from Perrys Chartered Accountants, who specialises in working with pubs and restaurants, explained that understanding tipping can be difficult for business owners and waiting staff. He said:

Many diners prefer to pay cash tips as they believe they are more likely to go to waiting staff than if they paid them electronically.

What many people don’t realise, including waiting staff themselves, is that if you receive a cash tip, it is your responsibility, rather than your employer’s, to make sure any relevant income tax on that tip is declared and paid to HMRC.

For lots of waiting staff, particularly those who are employed seasonally, or on a more casual basis, this can be difficult to organise.

Instead, an easier and more transparent tipping method for bars and restaurants is operating a ‘tronc’ scheme. This means the restaurant and staff can agree how tips will be shared in advance and administer tax payments more simply. Whether tips are paid in cash or card, any income tax can be dealt with by the employer.

The ‘tronc’ also means that any electronic payments to staff will not incur National Insurance deductions, although Income Tax is still payable.

You can find more information and advice about tips and tax here.

You can find out more about Unite the Union and join here.

Photo: PMW Communications Ltd.