The British Government has concluded, despite evidence to the contrary, that restaurant owners should not be profiting from tips and service charges and may legislate to ensure all monies are handed over to the staff.
With the rise of cashless transactions, customers are increasingly rewarding excellent service through credit card payments with these being processed by the company and retained. Not so with cash tips but in those cases, the individual pays no tax on this income and the money is not fairly shared amongst the staff. The Government is considering legislating to update a current voluntary code of practice amongst many restaurants to increase employer compliance.
While tips and gratuities are an optional award for excellent service, they often don’t get shared amongst the entire team and either an individual staff member or the owner receives the whole amount. The Government’s extensive investigation into fair practices came about after it was revealed that many of the most respected chains were exposed for withholding service charges from staff.