When the tips are down

WHAT'S THE STORY WITH TIPPING AND SERVICE CHARGES?TIPPING IS A tricky business in Ireland. In other countries it's a pretty straightforward affair - in the US, for instance, you open your wallet for everyone who looks at you in a hotel or restaurant and allow them to help themselves; in Spain and France, if you leave more than a few small-denomination coins behind you after a six-course meal, the waiters will look at you as if you've offered to sell them your mother for a fiver.

In this country, however, despite years of the Celtic tiger's largesse, many of us remain unsure about whether or not we should tip and, if so, how much?

Some people will leave a gratuity of 20 per cent unless the waiter actually spits in their soup in plain view, while others won't leave anything even if the waiting staff anticipate their every need and fulfil their every desire throughout the course of a long and pleasant evening.

To further muddy the tipping waters, virtually every restaurant in the country imposes service charges, either discretionary or obligatory, in lieu of (and sometimes as well as) tips. Most confine such charges to larger groups while others hit everyone with the charge - we looked at 20 restaurants in Dublin last week and found at least a quarter fell into the latter category.

These charges are not popular with Pricewatch readers, and we frequently get complaints that the practice, which adds as much as 15 per cent on to already high restaurant bills, denies diners the freedom to express gratitude or disapproval for the service they have received.

Readers also complain about the common practice in some restaurants of charging a service charge but still leaving a space for a tip. Typically this sharp practice occurs when credit cards are used; the machine is presented and the diner is asked - either by the waiter but more frequently prompted by the machine - if they would like to leave a tip, a manoeuvre which frequently leads to double-tipping.

Last week, the always lively online forum boards.ie returned to the familiar topic of tips. While at times the conversation sounded like the opening scene in    in which Mr Pink and Mr White nearly come to blows over the merits of tipping, a consensus was quickly reached, with most contributors declaring themselves anti-tipping - one poster even suggested that a simple thank you to the waiting staff might be the best way to express gratitude for a job well done.

"A lot of people in the hospitality industry depend on tips because their wages are set at a level that assumes they will get tips. That has always sickened me considering the prices charged by places that should be able to pay their staff properly," wrote one poster.

"I don't go in for tipping for the sake of tipping," said another. "I only tip when there is something that warrants it." A third said that because waiting staff in Ireland were paid minimum wage they would only tip "if the service is GREAT. I don't agree with this tipping business in Ireland. We have a minimum wage, everyone who has a job gets paid."

DESPITE THESE MISGIVINGS, only a true curmudgeon would welcome the news that from last Monday tax changes mean that a portion of the money earned by waiting staff is being hit for VAT of 13 per cent. A concession which had meant service charges would not be taxed as long as they were distributed in full to staff was withdrawn in a move which has been dubbed mean-spirited and disgraceful by restaurant owners, staff and their unions.

The Government has been blamed but the anger may have been misdirected, as it has had its hands tied following a ruling made by the European Court of Justice in 2001 in a case taken against the French government. It ruled that service charge concessions which were supposed to ensure staff could receive gratuities intended for them, but included as part of the overall bill, were invalid and did not meet the obligations under the EU VAT directives.

"It is very mean-spirited, it really is," says Gráinne Fitzpatrick of the Elephant Castle restaurant in Dublin's Temple Bar. "I think it is disgraceful. Waiting staff are normally paid minimum wage and need their tips, to bump up their wages." She says her restaurant has taken the decision to add the extra levy onto all bills which incur a service charge, which will see prices increase by just over 1.5 per cent. "It is a Government levy and I don't see why our staff should have to pay," she says. The restaurant is adding the 13 per cent VAT charge onto its existing service charge of 12.5 per cent which will increase a bill of €100 by €1.69.

She says a different approach would have cost waiting staff in the restaurant between €50 and €70 a week. "I don't see any way around it. Waiting staff aren't registered to pay VAT so they have no way of claiming it back. I am hoping this is going to be a short-lived tax and enough people will shout about it to have it removed." Another alternative, of course would be to scrap the service charges altogether and let staff rely on discretionary tips. Fitzgerald says the culture of tipping in this country makes the service charge, particularly on larger parties, essential.

"Tourists don't tip very well, with the exception of Americans," she says, adding that while Irish people's tipping instincts have improved, not everyone feels the need to tip anywhere close to the 10 or 15 per cent found elsewhere.

ANOTHER RESTAURATEUR, who preferred to remain anonymous, concurred. He said that if service charges were not imposed, waiting staff looking after larger groups would almost never be properly remunerated for their work. He said that often with big parties, when bills are divided up, people work out to the last cent how much they owe and rarely factor in a tip.

"The staff might have done an excellent job but end up with a fiver on a bill of €400. The truth is that in Ireland as diners we are nowhere near as advanced as the US when it comes to tipping. We have got better at it, certainly, but we have a long way to go."

He said he would not apply the new rules and because his service charges are manually added to bills they do not feature in the accounts. "I don't want to be in a position where I have to deduct money from my staff's tips to pay VAT and I won't do it. There are large operators taking advantage of their staff when it comes to service charges but we are one of the good guys."