Reclaiming VAT for waiter's tips

Reclaiming VAT for waiter's tips

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Hello, can you please tell me if it is allowed to reclaim VAT for waiter's tips. Those tips are not included in bill. E.g. Bill/receipt is for £30 and £3 tip was given. Can we claim back VAT on this £3 which would be £0.5?

Thank you.

Replies (8)

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By Outofpractice
13th May 2015 18:45

Nope
Tips like this are outside the scope of VAT.

They are not part of the consideration for the meal i.e. you do not HAVE to pay them you CHOOSE to

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By Anne Robinson
13th May 2015 19:58

Is this post for real?

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Replying to Ian Thurston:
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By Madi
13th May 2015 21:13

Re: Is this post for real?

Anne Robinson wrote:
Is this post for real?

 

It is, of course. Tip is a service charge therefore I thought that it might be VATable.

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By Outofpractice
13th May 2015 23:56

but a tip isn't a service charge
A tip is an uncalled for and spontaneous payment offered by a customer & outside the scope if VAT, also a tip is for & paid to the server personally not the restaurant & it is unlikely that they would be VAT registered.

A service charge is an amount added to the customer’s bill before it is presented to the customer.

There should only be VAT on mandatory service charges, if the bill says the charge is dicretionary e.g. you can choose not to pay it it is outside scope of VAT.

If you really want to be fussy - just like client entertaining they shouldn't even be counted as an allowable expense for tax (they don't meet the wholly and exclusively rule.)

Not meaning to be rude but a search on google (other search engines are available) of 'claiming VAT on tips' would have answered this for you, perhaps you could at least try finding answers for yourself & only post here if you are having real problems finding an answer.

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Replying to legerman:
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By Madi
14th May 2015 12:32

Re: but a tip isn't a service charge

Outofpractice wrote:

Not meaning to be rude but a search on google (other search engines are available) of 'claiming VAT on tips' would have answered this for you, perhaps you could at least try finding answers for yourself & only post here if you are having real problems finding an answer.

That is exactly what I always do. I would never post anything before first trying to google things.
Thanks for your reply.

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By DMGbus
14th May 2015 13:05

"Service not included" tips

I have seen restaurant menus where the phrase "Service not included" is stated.

This infers that a tip is required for the service and, I would suggest, therefore the tip is part of a price to be paid.

However, I much prefer the concept that a tip is a private arrangement between waiter and customer and nothing to do with the employer therefore outside the scope of VAT.

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By JLPrice
14th May 2015 13:00

Maybe just move onto the next question

While I understand your frustration at answering questions you may seem to be silly, instead of 'wasting your time' by answering the question, making a post and making the OP feel stupid, why not just ignore the question and move on to one you feel worthy of answering.

I wold much prefer people ask as many questions as they want to expand knowledge, and more importantly, ensure work is carried out correctly.

Making people feel stupid for asking questions is one of the biggest ways to stunt the growth of knowledge.

Just my opinion.

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By shaun king
15th May 2015 18:16

Potters Lodge Restaurant VTD 905

In this case the menu and bills rendered stated ‘10% service is added to all bills’ and was stated to be tax inclusive and the Tribunal ruled VAT due on the service charge.

If the service charge is truly optional then it is Outside the Scope of VAT even if a "suggested"amount of ip is shown on the invoice as was decided in the case of NDP Co Ltd (VTD 2653)

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