I once asked this question of a customer I had that worked for the Inland Revenue. Her reply to me was prety much as follows:
Regular tips that make up a fundemental part of your wages each week/month, (such as a waiter/waiteress gets) are taxable.
Tips that occur on an infrequent basis, ie: when a custy says, 'keep the change' or 'have a drink on me,' and gives you a couple of pounds, are not intended to be the target of this law as they do not make up a fundemental part of your wage.
I don't know if this differentiation is still made, as it was some years ago that I was told this, but it made sense to me at the time and still does.