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Restaurant tips no longer count as pay

In what has been one of the longest running loopholes in UK taxation, the UK government has revealed that restaurants who pay employees less than the minimum wage will not be able to "top up" wages with tips. This has been a gripe of many in the restaurant and catering industry for some time with a suggestion that proprietors were using tips from customers to make up any potential shortfall in employee salaries.

While on the surface this is a very welcome move, there are some concerns that it could impact upon the way tips are collected and distributed in the future. At the end of the day, a tip is a tip for the employee not the employer but who legally owns the right to tip income is open to debate. However, as the UK economy remains under pressure and areas such as restaurants and the catering industry continued to struggle, many people will be more concerned about keeping their employment than what their employer does with the tips.

The restaurant and catering industry has long been considered one of the "worst payers" in the UK business arena with many immigrant workers ending up in this area of the economy on less than the minimum wage.

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