Cashless tipping system Tipjar cleared for use by HMRC

Cashless tipping platform Tipjar has been cleared for use by HM Revenue and Customs (HMRC) in a move it says could spell the end of the need for traditional tronc systems.

Tipjar treats tips paid by card or smartphone as wholly owned by the staff themselves, bypassing the business and therefore eliminating the need for employers to run a tronc to distribute the funds.

The money can be made available to teams as soon as 20 minutes after finishing a shift.

Tipjar said if an operator hands over full control of tip management to its platform, businesses cannot be held responsible for tax or National Insurance contributions on tips collected.

Tipjar founder James Brown, who is also managing director at BrewDog, said: "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.

"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."

Customers can tip by scanning a QR code or clicking an online link where they can pay via card, Apple Pay or Google Pay.

Hospitality staff working in a team can pass a proportion of tips to a team mate or split the funds equally between all members.

Tipjar has a free option as well as more bespoke packages for larger hospitality businesses, with prices ranging from 99p a day to £1.99 per day per venue for multi-site groups.

It adds a 4% levy to the tip which can be optionally covered by the customer.

Hospitality businesses that already use the platform include Honest Burgers, Mission mars, Yard Sale Pizza and BrewDog.