Areas of Law / Employment

I work in a bar, earning £150 a week basic but as much again in tips. Do I need to tell the taxman about the tips?

I’m afraid so. If you’re an employee your employers should make an adjustment to your tax code to take into account the extra you make from tips. If you’re self-employed the Inland Revenue will expect you to declare a certain amount from this type of income in your line of work. From the taxman’s point of view tips and wages are both regarded as taxable income. However tips, service charges, gratuities and cover charges cannot be used to make up national minimum wage pay. So eligible workers will receive at least the National Minimum Wage in base pay with any tips being paid on top.

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