Service
Tronc Legislation Update Service
Bring your tronc policy and processes up to date with the Tips Act rules in force since October 2024.
Our tronc legislation update service brings your tipping policy, allocation rules and records in line with the Employment (Allocation of Tips) Act 2023, which came into force on 1 October 2024, and keeps them there as the rules change. People often call it the Tips Act after the year it started, but the Act itself dates from 2023.
Two different sets of rules
Operators often mix these up, and it matters:
- The Tips Act is employment law. It says workers must receive all qualifying tips, fairly allocated, with a written policy and records. It applies to every employer whose customers tip, tronc or no tronc.
- HMRC's tronc conditions in E24 are tax rules. They decide whether tronc payments are free of National Insurance. They existed long before the Act and did not change because of it.
A scheme can satisfy the Act and still fail the NIC conditions, for example if a manager directs the split. It can also meet the NIC conditions while breaking the Act, for example by paying tips late or deducting card fees beyond what is allowed. We check both.
What the Act requires now
- Pass on all qualifying tips, gratuities and service charges to workers, without deductions other than tax and National Insurance
- Allocate them fairly, having regard to the statutory Code of Practice
- Pay them no later than the end of the month after the month received
- Have a written tipping policy and make it available to workers
- Keep records of tips and their allocation for three years; workers can ask for information about their share
- Include agency workers who work at your venue in the arrangement
What we update
- Your written tipping policy, so it states what is a tip, who shares, the method and the pay date, in plain English
- Allocation rules, checked against the fairness factors in the Code of Practice
- Payment timing, so the cycle meets the end-of-following-month deadline even around payroll cut-offs
- Deductions, removing anything the Act no longer allows
- Agency workers, with a practical way to include them
- Records, so a worker request or an employment tribunal question can be answered from evidence
- Tronc documents, where you have one, so independence is still clear after the changes
Future changes
The Employment Rights Act 2025 includes further changes on tipping, including expectations around consulting workers on tipping policies. Details and commencement dates depend on regulations and guidance that may not yet be in force. We will tell you what is law today and what is proposed, and we do not ask clients to change policy for rules that have not commenced.
How it works
You send your current policy, tronc rules, a recent distribution and payroll dates.
We return a marked-up gap list and a revised policy draft.
We agree the changes with you and prepare a short staff announcement.
Optionally, we review again when new rules take effect.
Common gaps we find
The same issues come up repeatedly. Policies that say tips are "shared fairly" without saying how. Card processing fees deducted from tips beyond what the Act permits. Tips held back until a quarterly payout, missing the monthly deadline. Agency staff left out because they are not on payroll. Records that show the total pool but not each person's share, so a worker request cannot be answered. Each of these is usually quick to fix once it is visible.
Who this suits
Operators who wrote a policy quickly in 2024, groups with different practices at each site, and businesses whose tronc predates the Act. If you have no scheme at all, start with tronc scheme design.
What affects the fee
Scope depends on the number of venues and entities, whether you already have a written policy, whether agency staff are involved and whether you want ongoing update reviews. We quote after a free scoping call.
Not sure where you stand? Try the free tronc health check or request a call. For a full check against HMRC guidance too, see tronc HMRC compliance.
Official guidance we work from
- HMRC E24: tips, gratuities, service charges and troncs
- Distributing tips fairly: statutory Code of Practice
- GOV.UK: employee gets tips through a tronc
This page is general information, not tax or legal advice for your business. Outcomes depend on how your arrangement actually runs.
Related tronc services
Get in touch
Talk to a Tronc Expert
Free 30-minute call to review your tips, service charges and HMRC exposure — with specific advice on Tronc Legislation Update Service.
- +44 207 183 3436
- info@troncmasterservices.co.uk
- United Kingdom · Serving all UK hospitality