Tips, Troncs, and the New Code: What the 2026 Revisions Mean for Your Restaurant

BREAKING UPDATE: 14 July 2026 — Government Withdraws Revised Tipping Code

The Draft Revised Code of Practice on Fair and Transparent Distribution of Tips, laid before Parliament on 29 June 2026, was withdrawn by the government on 13 July 2026, less than three months before its planned October implementation. This changes the landscape significantly, and I want to give you a clear picture of where we stand now.

What happened

On 29 June, the government published the revised Code alongside its response to the tipping consultation. Yesterday (13 July), it pulled the plug. The withdrawal follows sustained criticism from the Unite union, which argued that the Code gave employers "carte blanche" to decide tip allocation after mere consultation, rather than giving workers genuine control over their tips.

Unite general secretary Sharon Graham put it plainly: "Workers should have control over their own tips, pure and simple. Most customers assume they do anyway. Giving managers control, even letting them keep a slice for themselves, is clearly unfair."

UKHospitality chief executive Allen Simpson described the sector as being left "in limbo" and is pressing the government for urgent clarity on both the status of the draft Code and whether the October 2026 timeline still stands.

Sources

• Restaurant Online, 14 July 2026: "Government withdraws updated tipping code of practice" (https://www.restaurantonline.co.uk/Article/2026/07/14/government-withdraws-updated-tipping-code-of-practice/)
• Personnel Today, 7 July 2026: Unite's initial demand for withdrawal (https://www.personneltoday.com/hr/draft-code-of-practice-on-tipping-released/)
• People Management, 7 July 2026: "Unite calls 'flawed' tipping code to be withdrawn" (https://www.peoplemanagement.co.uk/article/1963868/unite-calls-flawed-tipping-code-withdrawn)
• Business Quarter, 7 July 2026: "Tipping code row returns to Westminster" (https://businessquarter.co.uk/tipping-code-row-returns-to-westminster/)
• Gov.uk page still shows the draft awaiting approval (https://www.gov.uk/government/publications/distributing-tips-fairly-revised-statutory-code-of-practice)

What this means for you

1. The existing 2024 Code remains in effect. The original Code of Practice under the Employment (Allocation of Tips) Act 2023 is still live. You must still pass on all qualifying tips and service charges to workers without deductions, maintain a written tipping policy, and keep records. Nothing from the 2024 framework has changed.

2. Hold fire on implementing new consultation processes. The mandatory consultation requirement, which would have obliged you to consult workers on your tipping policy every three years, was part of the withdrawn Code. Do not invest time and cost building a formal consultation infrastructure until we have clarity on what the final requirement will look like.

3. Do not stop preparing entirely. Even without the new Code, a written tipping policy is already a legal requirement under the 2024 framework. If you do not have one, or yours is out of date, now is the time to get it in shape. Record-keeping for three years is also already mandatory. These basics are non-negotiable regardless of what happens next.

4. The October 2026 timeline is uncertain. The government has not confirmed whether the October implementation date is still realistic. It may push back, revise the Code again, or proceed with a modified version. We will update this piece as soon as there is a firm direction.

A note on this developing situation

This is a fast-moving story. No official statement has been published on Gov.uk yet; the existing page still describes the draft Code as "due to come into effect, subject to Parliamentary approval, in October 2026." The withdrawal was confirmed by trade press reporting. I am tracking this closely and will update this article as the position clarifies.

For now, keep operating under the 2024 framework. If you have already begun consulting your team on a revised tipping policy, that is not wasted effort — a transparent, well-documented policy is good for staff trust and good for tribunal defence under any regime. Just do not commit to a formal three-year consultation cycle until we know what the final law requires.

The sections below describe what was proposed under the now-withdrawn revised Code. They remain useful context for understanding the direction of travel, but the October 2026 timeline is now uncertain.

The Draft Revised Code of Practice on Fair and Transparent Distribution of Tips was laid before Parliament in June 2026. It is still a draft, subject to parliamentary approval, and the government expects it to take effect in October 2026. I am covering it now because the parts that matter to an independent operator, consultation, fixed sums, tronc oversight, and record-keeping, are unlikely to change in substance even if the wording shifts before it is finalised. This piece covers UK tipping law only. It has no bearing on Spanish operations, where gratuities and payroll sit under separate rules.

I ran three pubs, in London, Berkshire, and Oxfordshire, between 2007 and 2013. Back then, tips were cash in a jar, split however felt fair that week. The 2026 Code makes that approach impossible to defend. Here is what changes, and what to do about it before October.

From telling your team to consulting them

The 2025 Act, which the new Code implements, requires employers to consult workers when developing or revising a tipping policy, not just inform them of one. That consultation is required every time the policy is created or reviewed, and the policy must be reviewed at least once every three years regardless.

The Code is specific about what counts. A staff meeting where you announce a decision does not qualify. Consultation must be genuine, conducted in good faith, and given enough time that workers can actually respond. Where a recognised trade union or worker representative exists, you consult through them. Where none exists, you consult workers directly, and you have to make a real effort to reach people who are less likely to speak up: those with language barriers, less confidence, or roles that keep them away from the room where these conversations happen. A simple majority vote is explicitly not treated as a substitute for this.

Once consultation is done, you keep a written record of the process and the views raised, and you publish an anonymised summary to all workers at that place of business. The process is advisory. You are not bound to adopt every suggestion, but you do need to show you listened and applied fairness and transparency in your final decision. Handled properly, this is one more argument for treating your team as partners rather than a fixed cost, a point I have made before about why your team usually isn't the problem when service falters.

One thing worth knowing before you assume the worst: an employment tribunal judge must take the Code into account, but the Code itself states that failing to follow it in full is not, on its own, proof that you acted unfairly. It is evidence, not a verdict.

Fixed sums: caution, not a ban

The Code sharpens its language on pre-set allocations, the practice of guaranteeing a named individual or role a fixed sum of tips regardless of what comes in. It tells employers to exercise caution here, not that fixed sums are automatically unfair. The distinction it draws is this: differences in what people receive should come from objective factors (hours worked, seniority, role, performance) applied to the actual tips collected. A pre-determined commitment that overrides that calculation is the problem, because it shifts the variability of the pot onto whoever isn't covered by the guarantee.

If any part of your current setup uses service charge to top up wages to a set figure, or promises a flat per-hour amount out of the tronc, that arrangement needs a harder look. Not because it is automatically unlawful, but because you will need to show a tribunal, if it comes to that, that the criteria behind it are objective and consistently applied. If tips are quietly covering a wage cost they shouldn't be, that is also a sign it is time to re-evaluate your financial structure.

The tronc: independence is a shield, not an exemption

An independent troncmaster remains a sound way to handle distribution and its tax treatment. The 2026 Code is clear about the limits of that independence, though. If you set a fair framework for the tronc operator and reasonably believe it is being run fairly, you have met your obligation under the Code. If you later find out it is not, you have to act: instruct a change, replace the operator, or end the arrangement. Doing nothing once you know is itself a failure to comply, and it can be brought before a tribunal.

You are not expected to run the tronc yourself. You are expected to know if it goes wrong, and to fix it.

Records: three years, and a limit on requests

You must keep a record of every qualifying tip received and how it was allocated, for three years from the date it was paid. Workers can request to see the record covering their own employment, going back up to three years.

For clarity:

• A worker can make one request every three months.
• You must respond within four weeks.

What you provide shows the total tips received at the place of business and what that individual worker was paid, not what anyone else received.

If your POS or accounting software is not already set up to track this at that level of detail, sort it now. It is exactly the kind of task systematic operations management is built to absorb, rather than something to reconstruct by memory after the fact.

Getting ready before October

1. Audit what you are actually doing. Is the service charge covering a wage obligation it should not be? Are your allocation criteria written down anywhere, or does everyone just know the rule?
2. Talk to your troncmaster, if you have one. Confirm their allocation method rests on the same objective factors the Code expects, and that they understand the new consultation requirement applies to the policy, not just its administration.
3. Run the consultation properly. It does not need to be a town hall. A series of short, honest conversations works, provided you reach the people who do not usually speak up, and you keep a record of it.
4. Write the policy down in plain language, and make sure agency workers receive it too, not just direct staff.
5. Set up the record-keeping now. Three years of data is a long time to reconstruct after the fact.

Where this leaves you (updated for July 2026)

The withdrawal of the revised Code creates a frustrating period of uncertainty for operators who were preparing for October. The sensible approach is to focus on what is already settled law — written policy, fair distribution, proper records — and pause any structural investment in formal consultation cycles until the government clarifies its intentions.

Keep your basic tipping policy in good order. That much is already required. Beyond that, watch this space. I will update you as soon as the position becomes clearer.

This article was originally published in July 2026 and has been updated following the government's withdrawal of the Draft Revised Code of Practice on 13 July 2026. It covers UK tipping law only and has no bearing on Spanish operations. This is a developing situation; we will continue to update this piece as new information emerges.