Employment Allocation of Tips


If you receive tips on ‘more than an occasional’ basis, there is new legislation which is effective from October 2024, that you need to be aware of. By more than occasional, HMRC seem to deem a few tips a year as occasional and so if your business receives tips more than this, you need to put measures in place to comply with the Employment (Allocation of Tips) Act 2023.

Here are the key points you need to be aware of from this legislation:

  • The purpose of the new legislation is to ensure the fair and transparent allocation of all tips, gratuities and service charges to workers, by the following calendar month, without deductions, with the exclusion of tax. 
  • Maintain a written policy on how tips are dealt with at your place of business and ensure this policy is available to all workers.
  • Maintain a record of all tips paid at your place of business for 3 years, to which your workers have a right to request access.

If you need any further information on this legislation, please contact our payroll manager, Joe on 01623 420269 or email joseph@stopfords.co.uk

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