The Employment (Allocation of Tips) Act 2023 is commonly referred to as the Tipping Act and applies in England, Wales and Scotland (Great Britain). The legislation extends to workers which includes agency workers.
From 01 October 2024, employers are required to identify the tips, gratuities and service charges they control or influence. Collectively and for ease, ICB refers to these as tips and those in scope of the requirements are both:
- Employer-received - i.e. the employer receives and shares with staff; or
- Worker-received – i.e. the tips are given directly to the worker but the employer controls or influences the allocation
The legislation requires employers to be fair and transparent in how they manage and distribute tips. It imposes a statutory requirement for affected employers to have a written tips policy in place describing this fair allocation process and must be made available to workers and developed regarding the statutory Code of Practice and the Acas non-statutory guidance.
The Employment Rights Act 2025 in Great Britain extends an employer’s obligations and requires them to:
- Consult workers or employee representatives when developing or revising their tipping policies;
- Required at least once every three years; and
- Make the consultation available to workers at the workplace
It does not make any change to the underlying principle that tips must be allocated fairly and transparently.
On 05 February 2026, the UK Government launched a consultation on the proposals. This is open until 01 April 2026 and it is expected the new legal requirements and an updated Code of Practice will come into force from October 2026.
For Bookkeepers
The changes in the 2025 are all part of the UK Government’s ‘Plan to Make Work Pay’ initiative aimed at improving work conditions and wages. The consultation is relevant to a wide range of stakeholders, including workers, customers and businesses in tipping industries such as hospitality.
There are several ways to respond to the consultation by 01 April 2026:
