Tips and tax.
Here is the secret that they don’t tell you.
thankyü is a revolutionary de-centralised tipping solution delivered entirely through a mobile-first app.
Therefore any tips you receive on thankyü do not need to be processed through your employer’s payroll.
thankyü can receive tips from anyone and anytime. You are still responsible for HMRC Taxes, but these will be collected through your personal allowance (which is reviewed [usually] annually.
thankyü records every transaction in/out so you have the information when HMRC require it.
P.S.: there is also no Employee National Insurance. Tips received through thankyü are out of scope for NIC.
thankyü is great for personalising your tips and also great for cashflow management; you can earn more, get paid faster and control how you spend and save.
And if you have more than one job, then thankyü gives you one solution for managing all your tips with no need for multiple payrolls, or systems - so you can study, work in a bar and also drive for Amazon or Deliveroo.
thankyü gives you freedom.
Tips received through thankyü.
thankyü is a HMRC compliant ‘cashless tipping’ solution that enables you to receive tips directly from customers; tips are received without any involvement from an employer, therefore you are able to receive the tips gross (i.e. before the deduction of any tax or NIC).
Note that tips are not considered as ‘income’ towards the national minimum wage (and cannot be treated as such by an employer). Tips should not be thought of as a ‘gift’. Rather, they are classed as employment income which means they are taxable (but not subject to NIC) on you.
Although they are taxable, there will not be any tax deducted from them. This means you are responsible for telling HMRC about these tips.
Keep records of your tips.
You will have to show tips received on your self assessment tax return (if you fill one in).
If, as in many cases, you do not have to fill in a tax return because all your income is taxed under PAYE, you should tell HMRC about your tips. HMRC will usually adjust your tax code to collect the tax due. Otherwise, they may send you a bill at the end of the tax year or ask you to fill in a tax return.
To adjust your tax code, HMRC will need to know how much you received in tips. This means that you must keep a good record of what you have received thankyü keeps a record of all of your tips and transactions (these can be downloaded from within the App), and thankyü also provides an automated template letter (available within the thankyü app) that can be sent or emailed to HMRC.
Always check your tax code.
Once HMRC have ‘coded in’ an amount in respect of your tips, make sure you check your PAYE coding notice regularly to check if the amount is still accurate.
If you do not do this, and the amount of tips you receive goes down, you could end up paying too much tax. If the amount of tips you receive goes up but the amount in your code stays the same, you could end up owing HMRC money.
Contacting HMRC.
You can tell HMRC to adjust your tax code via your personal tax account (more info can be found at:
https://www.gov.uk/contact-hmrc or by phoning HMRC on the Telephone Number - 0300 200 3300.
Have your National Insurance number with you when you phone. It is a good idea to make a note of the date and time of your call, as well as the name of the adviser that you speak to and what is said.
