UK, August 2026 — As service charge and tip volumes at busier UK restaurants climb toward £1 million a year, specialist restaurant accountants are calling on operators to urgently review how their Tronc policies are designed and documented, warning that informal or poorly governed arrangements are increasingly exposed to HMRC challenge.

A tronc — the pooled system used to collect and distribute tips, gratuities, and service charge to hospitality staff — can offer significant National Insurance savings when run correctly. However, following the Employment (Allocation of Tips) Act 2023 and its statutory Code of Practice, restaurants are now legally required to maintain a clear, written tipping policy, distribute 100% of tips fairly, and avoid deductions such as card processing fees from the pool.

"At higher service charge volumes, the margin for error shrinks fast," said Gupta from Allenby Accountants. "We're seeing more restaurants come to us because their tronc arrangement worked fine when it was informal and low-value, but at six or seven figures a year, HMRC pays much closer attention to whether the troncmaster is genuinely independent. Get that wrong and the National Insurance exemption can be lost retroactively, with interest and penalties attached."

According to the firm, the areas causing the most compliance issues for growing restaurants include:

Troncmasters who are independent in name only, with management still influencing allocation decisions
Missing or outdated written tipping policies
Service charge pooled across multiple restaurant sites, which is no longer permitted
Administrative or processing fees still being deducted from the tronc pool
Inadequate record-keeping that cannot withstand an HMRC enquiry

The firm noted that restaurant groups approaching £1 million in annual service charge are particularly at risk, given the scale of potential back-dated liability if a scheme is later found non-compliant, alongside possible employment tribunal claims from affected staff.

"This isn't a set-and-forget policy," said Gupta from Allenby Accountants. "Tipping legislation has already been updated once since the Code of Practice came into force, and further changes are expected. Restaurants at this scale need their tronc policy reviewed as part of their regular payroll and compliance work, not treated as a one-off document."

About Allenby Accountants

A London-based accounting firm, Allenby Accountants, offers specialised services to businesses in an array of industries, including restaurants, SMEs, and contractors. With a concentration on client-first methods and technology-driven solutions, Allenby Accountants helps businesses in achieving long-term growth, efficiency, and compliance.

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Website: https://www.allenbyaccountants.co.uk/