Do I need a written tipping policy UK?

The Allocation of Tips Act 2023 came into force on 1 October 2024. It applies to any business where customers leave tips, whether by card, cash, or service charge.

Here's what the law requires:

You must pass 100% of tips to workers. Employers can no longer keep any portion of tips for the business. This includes card tips and discretionary service charges — all of it must go to workers.

You must have a written tips policy. The policy must explain how tips are collected and distributed. It doesn't have to be long, but it must exist in writing and be available to your workers on request.

You must keep records for 3 years. You need to document how tips were distributed and be able to show this to any worker who asks — workers have the right to request their tipping record once every 3 months.

Fair distribution is required. Tips must be allocated fairly between workers. You can use a tronc arrangement run by an independent tronc operator, which also has tax advantages.

If you operate a tronc system, the tronc operator (not you) decides allocation — but you still need a policy explaining the system.

Workers can bring a claim to an Employment Tribunal if they believe tips haven't been passed on correctly or the policy isn't available. There's no cap on awards.

For hospitality businesses especially, this should be a priority. The Fair Work Agency (which launched in 2025) has tipping compliance in its remit and can inspect records.