My son works for a

local restaurant and

receives cash tips.

Should he declare these for

tax purposes?

AS the tips relate to your

son’s work, they must be

reported to HMRC and,

depending on his level of income, income tax paid on them.

Usually, an employer or a designated member of staff

(called a “troncmaster”) will report the tips and deduct

income tax and National Insurance Contributions.

If no such system is operated, your son should report

them directly to HMRC. He can do this either by registering

for Self Assessment and completing a tax return or by calling

HMRC and telling them how much he received in the tax

year – which ends on April 5. He will need to do this every

year. Most people choose to call HMRC as it is easier than

completing a tax return.

HMRC will collect the tax due by instructing his employer

to deduct more tax from his wages.

Further guidance can be found at www.gov.uk/tips-at-

work/overview. You can register for Self Assessment online

at www.gov.uk/register-for-self-assessment/overview. HMRC

can be contacted on 0300 200 3300.

A Little Tip . . .

To tip, or not to tip? That

has always been the

question, especially during

the festive period. In fact,

the history of tipping or the

giving of Christmas “boxes”

goes back over 200 years.

The earliest recorded

mention of the actual

custom of tipping is from

the turn of the 19th

century, when “The Times”

newspaper published a

letter about a dignitary

visiting their friend in the

country and having to “tip

everyone from the

housekeeper to the

chauffeur.” With over 40

staff, it almost bankrupted

him!

Since then, times,

customs and attitudes to

tipping have changed,

although we Brits have

remained a generous lot in

recognition of good

service.

More recently in the

1960s and ’70s, it wasn’t

unusual for the average

worker on basic salary to

save up to tip the dustman,

the milkman, the postie

and even the local

hairdresser for their

previous year’s hard graft.

Tipping todayToday, due in part to a

tightening economy and

differing social trends, very

few of us have milkmen

deliver our milk any more.

Our postmen and women

change from one week to

the next so we feel no

allegiance to them and

high Council Tax charges

(and bans by some local

authorities on staff

accepting tips) have left

few of us willing or able to

provide a gift for our

rubbish collectors.

Despite this, Debrett’s, at

least, still makes

suggestions as to what is

appropriate to give to

various trades and

professions at Christmas:

l Cleaner – one week’s

wages

l Postman – £5

l Newsagent’s paperboy/

girl – £5

l Children’s teachers – a

personal gift

l Babysitters – £5-10.

Dining outOne area where tipping

has become de rigueur is

dining out. Britain has seen

a food revolution over the

past 20 years, with many

more of us eating out

regularly, whether for

business or pleasure.

The effect of this culinary

explosion has been

increased competition

between restaurants vying

for our business, with

service standards a key

component of the dining

experience. So we have

learned to tip (or at least

to agree with the

discretionary service charge

added to most bills these

days) as a natural

evolution of eating out.

How much?According to a recent

survey by online restaurant

booking service OpenTable

(www.opentable.co.uk),

87% of Brits always leave a

tip, contributing 9% of the

bill, with the average tip

value being £4.18. Sorry,

gents, but the survey also

found that when it came to

tipping, men were far less

generous than the ladies,

with 17% of men never

leaving a tip at all in

contrast to 10% of all

women.

Within the UK, the survey

found that whilst Scots

were most likely to tip

(91%), it was our Welsh

friends less likely to tip at

all (73% of those polled

saying they were against

tipping altogether) while

within England, London

averaged a tip value of

£5.68 with 20% of diners

in Yorkshire (one in five)

electing not to tip at all. n

Please note that the information given on these pages does not constitute financial or legal advice and is for

general guidance only. Please consult a professional financial adviser for advice on your own circumstances.

Ask The ExpertRobin Sykes, Chartered Tax Adviser Sykes CA, is here to help.

Q

A

by Barry Cashin, Consumer and Money Expert.

FINANCE 45

Many people prefer to

give gifts in kind, such

as a box of chocolates

or tin of biscuits, rather

than cash, to show their

appreciation to the

hard-working people

who have helped them

over the year.

Kind

Thoughts

Tipping TalesThe people of the US

can be very generous if they’re pleased with the service they receive.

They say that fortune favours the brave. Well, it also favours hard work. Imagine the joy of a server at an American steak restaurant who stayed after hours to cater for Hollywood legend Johnny Depp and his

entourage. For his efforts, Johnny tipped him $4,000!

A policeman in New York, instead of tipping his waitress 20%, asked her if she wanted to share the winnings of a lottery ticket instead. She agreed. The policeman won the jackpot and duly shared the £4 million winnings with the waitress! Next month: budget-wise entertainment.

moneyYour

For more information,

visit www.SykesCA.co.uk

What’s on The BillWHETHEr you’ve had great

service or not,

diners should

be aware of the

addition of a

“discretionary”

or “voluntary”

service charge

on their bill,

most often 10%

or 12.5% of the

total. It is not

made clear

whether this tip

goes to the individual server or is pooled by all staff.

What you should know, however, is that this service

charge is not obligatory and as a consumer, you do not have

to pay it if you do not want to. If you wish to tip your

personal server in cash or do not feel that the service/food

offered warrants a tip at all, you have the right to ask for it

to be removed from the bill and the restaurant has to oblige.

If you also want to know how any gratuities are

administered by the restaurant, just ask the manager before

punching in your PIN number. If you do tip, always try to

give cash to your preferred server.

iSto

ck.