Service tax removed from UK restaurant but employees claim share on staff tips

Published on : Monday, May 2, 2016

UK resService charges on restaurant bills could be banned in the UK with the recent government crackdown; however the law cannot be stretched to tipping. Customers can make extra payment at will which cannot be forced by the restaurant bosses.

 

A dramatic overhaul of tipping policy could also see owners forced to give staff every penny in tips and service charge instead of taking a share – or all of it – themselves.

 

Business Secretary Sajid Javid will publish a nationwide consultation setting out the Government’s proposals for the handling of tips following a seven-month investigation.

 

It follows a row over firms taking staff tips to make up for the costs of introducing the higher national Living Wage.

 

The slash of service tax has directly affected staff tips as most restaurant owners are cutting shares from tips and slashing staff perks.

 

There has also been public anger at restaurants failing to make it clear to customers that they do not have to pay a service charge or that tips do not go to staff.

 

 

Some diners also complained that they had been led to inadvertently tip twice – once through a service charge mentioned only in the small print on a bill or menu, and again when they were asked to leave a discretionary sum when they came to pay.

 

 

Under the Government plans, a current voluntary code of practice could be enshrined in law to force restaurants to be more transparent and make it clear to customers they do not have to pay tips.

 

 

Workers would receive all of their tips given to them for their service, rather than the money going to their bosses.

 

 

Mr Javid will say: ‘We want workers who earn a tip to be able to keep it. We will look closely at all the options, including legislation if necessary.’

 

 

Currently there is no legal requirement covering what proportion of a discretionary tip should go to staff and how much to the employer.

 

There has also been public anger at restaurants failing to make it clear to customers that they do not have to pay a service charge or that tips do not go to staff.

 

 

Some diners also complained that they had been led to inadvertently tip twice – once through a service charge mentioned only in the small print on a bill or menu, and again when they were asked to leave a discretionary sum when they came to pay.

 

 

Under the Government plans, a current voluntary code of practice could be enshrined in law to force restaurants to be more transparent and make it clear to customers they do not have to pay tips.

 

 

Workers would receive all of their tips given to them for their service, rather than the money going to their bosses.

 

 

Mr Javid will say: ‘We want workers who earn a tip to be able to keep it. We will look closely at all the options, including legislation if necessary.’

 

 

Currently there is no legal requirement covering what proportion of a discretionary tip should go to staff and how much to the employer.

 

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