UK Draft Tipping Code Mandates Staff Consultation

The UK government has re-released a draft of its revised Code of Practice on the distribution of tips, with new rules expected to take effect by the end of 2026. The draft is currently under consultation, and businesses have until September 29, 2026, to submit feedback.

The draft code, which was unexpectedly withdrawn in July 2026 before being reissued, introduces several key changes for hospitality businesses. Founders and owners must now understand how these potential rules could reshape their operations regarding staff gratuities.

Mandatory Worker Consultation

A fundamental shift requires employers to consult their workers before altering any tipping policy. Under existing rules, businesses must allocate tips fairly and maintain a written policy, but staff involvement is not formally required. The draft code changes that.

Simon Bocca, Founder and CEO of payroll platform PayCaptain, states businesses will need "a written, consulted-on tipping policy." Gillian Wright, Co-founder of tronc software JustTip, advises businesses to start planning their consultation processes, noting this duty is "new law, not only guidance."

Policy Review and Record-Keeping

Once enacted, the code will require businesses to periodically review their tipping policies. Employers must revisit their policies at set intervals, keep workers informed, and maintain detailed records of the entire process.

Gillian Wright suggests technology can alleviate this administrative burden. Automating tasks like running consultations, keeping records, and scheduling policy reviews can take this work off an owner's plate. The code mandates that tipping records be held for three years.

Digital Tips and Allocation Scope

The draft code clarifies that all tips, regardless of collection method, fall under the new rules. This includes automatic service charges, card tips, and QR code payments. The method of payment does not create an exemption; the allocation of the funds determines if the rules apply.

Simon Bocca stresses that businesses may need to audit payments from app-based and QR code tips. He explains that "allocation rather than payment method determines whether it’s in scope." Companies should verify their existing digital setups comply rather than assuming they are already aligned.

Fair Tip Pool Allocation

The code pushes for more formal and justified tip distribution, moving away from informal, long-standing agreements. It broadens the definition of the tipping pool to include back-of-house staff, not only front-facing workers.

This change aims to prevent unexamined allocations that could lead to equal pay or discrimination claims. Businesses will need to justify the overall fairness of their tipping scheme, avoiding fixed percentages for senior staff unless properly reasoned.

Tronc Arrangement Responsibilities

Using a tronc-a separate arrangement for distributing tips-does not automatically absolve employers of liability. Gillian Wright clarifies a common misconception: "A lot of owners assume that once tips go into a tronc, the liability goes with them."

She states that liability only transfers if the tronc is genuinely independent and well-run. Employers must stay involved, checking the arrangement rather than disengaging completely. The label alone is insufficient for compliance under the new draft code.

The government's consultation period remains open until September 29, 2026. Ben Thomas, CEO of TiPJAR, says the feedback will "help shape how the Code works in practice, reducing uncertainty, creating a level playing field." Small venues are specifically encouraged to participate to ensure the rules work for businesses of all sizes.