Through the platform, any tip paid by a customer digitally – either by card or smartphone – is equivalent to cash and is wholly owned by the staff themselves, by-passing the business and, therefore, the need to operate a tronc system.
Getting the green light, TiPJAR says, makes it the only system of its kind in the UK through which staff can collect and pool digital tips.
TiPJAR says that as long as an operator hands over full control of tip management to the staff via the TiPJAR platform, they cannot be held responsible for tax or National Insurance contributions on the tips collected and can move away from operating tronc systems in their business.
“We are delighted that HMRC agree with our view on how modern tipping can work better and work harder for both the employee and the business,” says TiPJAR founder James Brown.
“We hope this clearance will encourage more companies, and their employees, to drop old fashioned tronc systems, which are a headache to organise, costly to run and lack transparency.
Alex Moore, chairman of TiPJAR and founder of Rosa’s Thai, says that now, more than ever, customers want to recognise great experiences and reward good service with a tip but fewer are using cash.
"TiPJAR was designed to work like cash, so it facilitates instant reward and recognition, re-imagining the true purpose of leaving some money on the table by way of thanks in an increasingly digital world."
"It’s a brilliant solution for workers and now, with this clearance from HMRC, it will make a massive difference to companies, too.”
Operators using TiPJAR include BrewDog, Honest Burgers and Yard Sale Pizza.