A: If the menu or other customer notices states that there is an optional / discretionary service charge, and the customer therefore has a genuine choice of whether to pay this charge, then this receipt will be a gratuity and outside the scope of UK VAT (on the basis it doesn’t represent a supply of anything by the restaurant); the same is true for unsolicited tips given by customers to the staff or restaurant. On the other hand, if the menu or notices simply state that the service charge is included or compulsory, then the service charge will follow the VAT liability of the catering supplied.