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The government has published its response to the 2016 consultation ‘Tips, gratuities, cover and service charges’ which set out proposals to make tipping fairer.

There are currently no specific legal rules governing the proportion of voluntary or discretionary payments for service which must go to workers. A draft bill was introduced in 2019 but this never progressed through parliament.

The 2016 Consultation followed a 2015 Call for evidence. Its objectives were that all payments should be:

No proposals were made to alter the Income Tax or the NIC treatment of Tips, gratuities and troncs.

The majority of the feedback from the consultation came from customers rather than workers and employers and showed strong support for:

The government now plans to bring forward legislative measures to ensure tips, gratuities and service charges go to workers as part of a new Employment Bill. The measures will include:

No timetable has been set for the changes, with the Employment Bill to be brought forward ‘when parliamentary time allows’.

Useful guides on this topic

Tips, gratuities and troncs
How are tips, gratuities and troncs taxed? What are the rules for National Insurance (NICs)?

Pubs & Bars: What expenses can I claim?
This guide outlines what expenses unincorporated pub and bar owners can claim for tax purposes. 

External links

Government Response ‘Tipping, gratuities cover and service charges consultation’ 

Guidance: National minimum wage: code of best practice on service charges, tips, gratuities and cover charges


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