How do I declare tax on the tips I’ve earned with EasyTip?

For businesses which want to withhold taxes from tips collected by your employees, EasyTip can send gross tips to your businesses bank account to allow the business to withhold relevant taxes via PAYE. This option is called “employer reporting” and alleviates tax reporting responsibility, on tips earned via EasyTip, from employees.

For self-employed staff, you will need to report tips as part of your annual self-assessment. You can use the EasyTip app to know exactly how much you have earned in any given period and report this accordingly.

There are also instances when employees, despite being on payroll, choose to report their tips individually. In such cases, employees can use the EasyTip app to track their tips and report them either as part of self-assessment or through updating their tax code. The latter method allows individuals to report additional earnings of up to £2,500 per year and pay tax via PAYE in the following tax year without completing a tax return. This can be arranged by addressing a letter to HMRC, informing them of your collected tips and requesting an update to your tax code accordingly.