Tips On Tipping
Hospitality businesses face huge challenges – changes to legislation, retaining skilled staff, rising operational costs and consistency in providing an enhanced customer experience
If someone offered you the opportunity to save money, increase revenue, incentivise your team, improve staff retention and ensure compliance with new tipping legislation then you’d be sure to want to find out more – right?
Let me introduce to you Empower Finance’s recommended digital tipping solution – a revolutionary tool which not only modernises how tips are collected and distributed amongst staff, but one which also streamlines financial operations and ensures full compliance with new tipping regulations.
Whilst the immediate benefits are glaringly obvious, the knock-on effects of implementing a digital tipping solution are far reaching.
NATIONAL INSURANCE (NI) SAVINGS
By using a digital tipping system, tips are treated as gratuities directly from customers to staff, meaning the business doesn’t pay NI contributions on those amounts, leading to significant cost savings.
VAT EXEMPTION ON TIPS
Tips collected digitally ensures a clear separation from the business’ sales and are exempt from VAT – directly impacting profitability.
REDUCED PAYROLL BURDEN
As tips aren’t included in the business’ payroll, the administrative burden and costs related to processing tips through payroll are reduced.
INCREASED STAFF TAKE-HOME PAY
Since tips aren’t subject to the same deductions as wages, staff receive a larger portion of their tips, without the business having to raise wages directly.
IMPROVED FINANCIAL EFFICIENCY
By lowering NI contributions and avoiding VAT on tips, businesses can allocate those savings to other areas, improving overall financial health and operational flexibility.
SEAMLESS TIP COLLECTION
Effortlessly collect tips from customers through digital payments and eliminate handling cash, reducing the risk often associated with traditional cash tips – loss, theft and mismanagement.
BOOST STAFF MORALE
Fair, transparent and timely tip distributions means employees feel they are fairly compensated for their efforts making them more likely to stay. This improvement in staff retention translates into a more experienced and skilled workforce, benefiting overall service quality.
ENHANCED CUSTOMER EXPERIENCE
Payment methods are simplified as customers can tip directly through the digital platform in one simple transaction. Offer a convenient, contactless way for customers to show appreciation, creating a better overall experience.
STREAMLINED TIP DISTRIBUTION
Automatically track and distribute tips to staff, save time and reducing errors in manual calculations.
IMPROVED FINANCIAL TRANSPARENCY
Track tipping trends with detailed reporting, allowing for better business insights and planning.
INCREASED REVENUE
By offering simple, digital tipping options, businesses can often see an increase in the number of tips collected overall.
COMPLIANCE WITH LEGISLATION
The TipJar platform ensures complete compliance with the Fair Tips Act – approved by HMRC, protecting you against potential disputes.
Integrating a digital tipping solution is simple, cost effective and stands to benefit businesses, employees and customers alike. As the industry continues to evolve, it is crucial that hospitality businesses leverage technology to meet the demands of the modern marketplace. Transform your tipping strategy, reimagine employee engagement and propel your business into a profitable, customer-centric future.
Interested? You should be – find out more by contacting Dom.
Dom Ritchie
Empower Finance
The Old Bakery, Green Street
Lytham FY8 5LG
0330 174 3494
empowerfinance.co.uk
