In thinking Managers shouldn't stop staff having card tips?

[Tipsless]

I work for a small restaurant, it's owned by a husband and wife team.

The DH has taken early retirement from some sort of Civil Service role.

He's now taking a larger role in the business and is there every day.

The DW has run it quite happily for several years. Obviously it's been hard recently but business is picking up again and it seems to be in a solid state now.

DH has come in like a bull in a China shop, and is scrutinising every penny. Down to precise portion control - weighing salad leaves for garnish 🙄. We have to take our own pens in to write with. We have to pay for sodas off the tap now at 85% of retail.

The staff have now been told that as there is a fee to the business in every card transaction, we can now only accept tips with cash.

I'm really not sure what the fee is, but informal chats within the staff have established we'd be happy to have the card tip minus whatever fee is involved.

Not many people carry cash now, so we're seeing a real downfall in tips.

AIBU to think this is Unreasonable of the management?

Any income is subject to VAT. Tips are not yet excluded in this!

if an owner is not paying VAT properly on their PAYE staff? It’s just not even worth talking about!

@Mangogogogo I think you're incorrect - service charge yes, freely given tips - no

www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc06130

You are talking absolute garbage here, only vatable income is subject to vat, income which is exempt, zero rated or outside the scope of vat is not subject to vat, tips are not subject to vat, this is not fiddling it’s how the rules work. Sometimes people will end up paying more vat than they need as their records can’t seperate out what is income for meals and what is tip

You need another way or of recording the sales rather than just taking it from the card machine/ bank statements. Do you ring through a till also?

@Morph22010 yes that's what I have to do - it's a pain having to go through each individual receipt and check it against the till reciept, and then allocate the difference to Tips. Luckily we are very small family run affair with a part timer, so I only have to do it when she is working. When it's just me and DH we just bung it all through and suck up the VAT due.
I'm hopeful that this new machine will be able to be changed so it will split the tips our but got to wait until after the BH to speak to them again.