My client owns three coffee shops. I haven't had the chance to grill the client thoroughly on how he treats tips, but what I have gleaned from the extremely grumpy employees is that the tips are all put into a central pot from which the employer treat them to an annual night out open to all staff, but tough luck if you can't make it to the night out.
The staff aren't terribly pleased about this but from what I can gather, there is no tax or nice deducted from the tips nor is there an official process for dealing with them. My understanding is that the tips can be held and distributed by a nominated person that is not the employer, but that tax and nics will need to be deducted
Please could, anyone advise on the way the tips are currently being dealt with, am I missing something? Also is there a better way to deal with tips in these types of business?
Thank you in advance for any help