Section 692 — Income Tax (Earnings and Pensions) Act 2003: Organised arrangements for sharing tips

Organised arrangements for sharing tips 692 1 PAYE regulations may make provision with respect to organised arrangements for tips to be shared among employees by a person (“P”) who is not the principal employer.

2 PAYE regulations may include provisions which, for the purposes of PAYE regulations—

a treat every payment made by P to an employee by way of the employee’s share of any tips (including the retention by P of P’s own share if P is an employee) as a payment of PAYE income by P, and b treat P as the employer in relation to every such payment.

3 PAYE regulations may also include provisions which—

a apply if P has failed to comply with any of the requirements of PAYE regulations, and b treat the principal employer, for the purposes of PAYE regulations, as making payments to the employees of any tips paid over to P by the principal employer.

4 In this section— “ the principal employer ” means the person under whose general control and management the employees work; “ tips ” means gratuities and service charges.