Sign up to The Irish Times Archive (1859 - 2008)My Account »

EMPLOYEES WORKING in the hospitality sector will not be charged VAT on tips they receive from customers - but they do face a tax on service charges under arrangements being introduced next week.

While many view service charges and tips as interchangeable, there is a distinction - service charges tend to be compulsory and are added to the customer's bill before it is presented to them while a tip is not included on a bill.