The bloody service charge!

Always as excuse not to keep up with posts which make clear the poster is happy to tip - or pay a service charge, but not both

Yawn

Its only VATable if its a mandatory service charge.

HMRC would only estimate tips given direct to the staff if they suspected they werent reporting what they were receiving in cash via self-assessment, so an unlikely scenario unless 4/5 staff were reporting and 1 wasn't or someone was grassed up etc

I’ve only ever seen a restaurant bills with service extra and a total of VAT. I worked it out somewhere once and it was included so maybe that restaurant got it wrong.

Now I didn’t know the service charge wasn’t VAT able. All the restaurant bills I’ve seen lump it all in together. I would have thought they’d have to allocate it differently to show. Eg when I invoice I have to show what is 0% Vat, 5% and 20%. Maybe I should ask for a VAY receipt every time!

I also didn’t know that about tips. How on earth can HMRC estimate the tips people get? Is that really true? As a student I was certainly never asked what tips I got, not taxed in it but that was 20 years ago b

Always an excuse to justify not tipping

yawn!

Unless you’re in America, you don’t need to pay a service charge or tip; the employer pays their staff to do their jobs. Tipping is for exceptional service if the customer can afford to - it shouldn’t be an expectation.

How to win friends and influence people

If wait staff take a similar attitude towards their customers it's perhaps not surprising if they don't get tipped

... no one wants to see the UK & Europe going down the north americain route where tipping is expected at 20% or more (40% according to a recent tweet I saw)

That 40% probably represents the tip wished for rather than tips normally given, @IhadaStripeyDeckchair - like when you use a public loo in europe and find a dish hopefully sprinkled with 1 and 2 euro pieces

Another ruse I've seen is the "attempted shame" when a huge service charge is added on and a customer objects: "Oh I'm so sorry, that's what our regulars usually pay and I made a mistake"

Gouging, all of it; just leave the customer to make their own mind up and stop all this pretence

I’ll explain.

VAT is added to any food and drink if it’s consumed on the premises.

The service charge is not a Vatable cost BUT the employee pays income tax on that earning.

Even if you pay that service charge or tip in cash a server will be liable to pay income tax on that cash tip.

The government is very strict on this and actually estimates cash tips on sales for tax purposes but the restaurant has to disclose this amount to the revenue.

vat and income tax are not the same thing.

Most take away food however is not subject to vat.

So when prices are more to eat in that takeaway it is actually vat that you are paying .

Why do some restaurants add a service charge? Aren’t waiters and waitresses paid minimum wage now ?

What on earth are you talking about?

VAT??

VAT isn’t added due to service charge!!!!

Christ almighty Mr Scrooge! How tight are you?

Ime, people never correlate higher prices to higher wages for service staff, it's just not even a consideration for most, only talk about being ripped off and how the experience of having other people cook, serve and clean up after you is too expensive.
And for those that do, they genuinely seem to feel that as the customer and the one using the service, they're entitled to stellar service for less than it costs to provide that service and pay the people delivering it a decent wage, people say they wish they'd not put a service charge on and just charge more, but in practice balk at that as well.
People just don't want to pay for it, either in with the price or as an option, they expect someone else, the business or the servers, to subsidise the service they choose to use, which is in no way essential.

ETA - I also don't agree with the service charge as someone who works in the industry - I'd rather go without the tip/charge than people use it as another reason to have a moan and release their frustrations at me.

Thinking about why I tip - it’s because I saw my parents doing it when I was growing up - but that was definitely more rounding up or leaving a note of service was good

i just don’t feel we are in the same world anymore though now that wait staff are guaranteed minimum wage. I would rather pay more for the food etc than have to pay a service charge and then make a choice if I want to leave a particular staff member a tip

if a restaurant can’t survive on higher then people have at least made their choice clear - the price is not worth it to them

I have a few independent restaurants I go to that I would happily pay more for and there are a few in the area that I have been to once because they weren’t great. Just because a restaurant is independent doesn’t mean it deserves to survive

What I hate about tips is the percentage charge, why should I pay more tip of if I get a £20 bottle of wine or a £50 bottle of wine, the waitress is still doing the same job either way - FWIW I always tip

We need to put a halt to the tipping culture; it's illogical and no one wants to see the UK & Europe going down the north americain route where tipping is expected at 20% or more (40% according to a recent tweet I saw).

We have a min wage which is increasing every year & far better employee rights v the US so id give up tipping everywhere if it were up to me.

If your business is not viable without guilting charity (and yes its charity), then your business is not viable.

Put your prices up if you need to take more money in. If your business is good and in the right location, it will survive

Totally agree. So many people have not got a clue how hard it is to make a profit up in this industry at present.

There is no VAT added to optional service charges, it is only added to mandatory service charges, and yes the server is taxed on the tip.

I nearly always tip. The service has to be pretty bad not to. I like the choice. I tip anywhere between 10 and 20%. I don’t want someone to decide for me. It’s added deliberately as some folk won’t notice and just pay it and some are too shy to ask for it to be removed.
And I have worked as a waitress in my youth.

What?

I would much prefer that we didn't have any tips in the UK. If you want to charge £12 for the burger, charge £12 don't charge £10 then add a service charge to make it up.

Not unreasonable.

The practice of adding service change that can be removed "on request" is basically guilt tripping customers who (typically) would feel awkward asking for that to happen. Particularly when you're in a group of diners and the others wont challenge it.
I get it removed or pay depending on the quality of service. So, my choice! But I'm more inclined to not pay just because they've pissed me off at that point.

The thing is - the world has changed over the last thirty years

full time minimum wage is not a bad income - many graduate roles are being bumped up because the starting salary is below the new minimum wage. Minimum wages ultimately encourage wages to stick - other countries that have them show that wages will move to that point.

then we have people eating out a lot more than 30 years ago and there are a lot more restaurants/cafes on the high street

combine the fact that more people are earning the same wage as wait staff and you will find people can’t/don’t want to supplement that min wage when that is all they are on

its not surprising a lot of restaurants fail either - it’s competitive and because of the economy at the moment the demand has gone down a bit. Restaurants have no more right to exist than independent book shops or greengrocers. Do we give those independent shops extra money to support them?

I personally don’t mind tipping but I will choose how much and other people can choose too without being made to feel guilty