Taxes

gbartlett1980

How much tax do you pay on tips?

agrinnall

I thought Google must be broken, but no...

https://www.gov.uk/tips-at-work/tips-and-tax

Dazed_and_confused

This tax year the government has decided tax on tips will be a minimum of 0% and maximum of 45%, although those of us earning enough to pay 45% tax rarely get tips :-(

If you are lucky it will be 0, 20, 40 or 45% and if you unlucky it will anything in between 0 and 45% (not actually say 25% but you might pay some tax at 20% and some at 40%).

Cook_County

Dazed_and_confused wrote: »

This tax year the government has decided tax on tips will be a minimum of 0% and maximum of 45%, although those of us earning enough to pay 45% tax rarely get tips :-(

If you are lucky it will be 0, 20, 40 or 45% and if you unlucky it will anything in between 0 and 45% (not actually say 25% but you might pay some tax at 20% and some at 40%).

If collected by the restaurant the tip will be inclusive of VAT, so 20% goes to the government. If the net is paid out as employment income it should also be subject to NIC.

TheCyclingProgrammer

Cook_County wrote: »

If collected by the restaurant the tip will be inclusive of VAT, so 20% goes to the government. If the net is paid out as employment income it should also be subject to NIC.

If the tip/service charge is optional there shouldn't be any VAT on it.