Staff tips in a restaurant
I have been asked to quote for preparing the accounts of a limited company which trades as a restaurant.
I am told at the moment that they do not accept tips by credit card and that the staff have all signed letters to say that they will deal with their own tax on tips. However when I asked if the kitchen staff received any tips I was told that they did - everything is pooled and divided out in a manner agreed by the staff. The management take no part in this arrangement.
I am comfortable that no NI is due on the tips because there is no involvement of the company but my feeling is that there should probably be a tronc master since the staff pool the money before distributing it and it's not just a matter of each member of staff dealing with their own tips.
Does anyone have any thoughts or practical suggestions?