It’s the venue’s sole responsibility to have suitable and compliant tip arrangements in place. Treatwell POS considers all tips as freely given and therefore outside the scope of VAT. PAYE does not apply for cash tips directly given to employees, but PAYE must be operated on all tips paid by an employer to an employee. This section explains how Treatwell POS technically treats cash and non-cash tips. If you are in doubt about how to manage tips, we recommend that you seek advice from HM Revenue & Customs (HMRC), not from Treatwell.
Treatwell POS has no function to track cash tips, any cash overpayment is systemically treated as change. For example, if a customer pays £/€50 cash for a £/€45 bill, the receipt will state the £/€5 cash overpayment as cash change. It’s the employee’s responsibility to advise HMRC of the amount of money received.
Treatwell POS treats and tracks all non-cash overpayments for payment groups ‘card’ and ‘voucher and other’ as tips. So if, for example, a customer pays £/€50 with American Express for a £/€45 bill, the receipt will state the £/€5 overpayment as tip. In such cases Treatwell POS automatically creates a cash withdrawal in the amount of the non-cash tip (£/€5 in this example) indicating that it is a ‘tip’ and refers to the related transaction. The employee is expected to instantly take the cash amount out of the cash drawer and the employer is responsible for organising PAYE on any tips paid to the employee. All tip payments are unalterably logged in the transaction report, thus any non-cash tip payment can be identified and connected to the particular employee. If the employer does not want to support non-cash tips Treatwell recommends a work instruction disallowing overpayments for the ‘card’ and ‘vouchers and other’ payment group.
Note: If a checkout with non-cash tips is refunded the automatically created tip cash withdrawal is balanced by an automatic tip cash deposit. So the employee has to put the tip back in the cash drawer.