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HMRC internal manual

National Insurance Manual

Tips, gratuities and service charges: Meaning of gratuities and offerings

Channel 5 TV Group Limited v Peter Morehead (HM Inspector of Taxes) SpC3070/2003

There is no definition of gratuities or offerings within paragraph 5 of Part 10 of Schedule 3 to the SS(C)R 2001. In *Channel 5 TV Group Limited v Peter Morehead (HM Inspector Of Taxes) *the Special Commissioners concluded that gratuity

  • means a voluntary payment given in return for services rendered where the amount of the payment depends on the donor and where there is no obligation on the part of the donor to make the payment
  • includes, but is not restricted to a tip.

For more information about this decision see NICs Case Review 1/03.

See NIM02925 about payments in respect of tips.