If you’re running a hospitality business with a tronc scheme, you’ve probably spent the last year getting to grips with the Employment (Allocation of Tips) Act 2023. Fair distribution, transparent policies, detailed record-keeping – it’s been a lot.
But compliance isn’t a one-and-done exercise. The challenges and opportunities in the hospitality sector are a moving feast, and the tronc schemes that thrive in the coming years will be those that adapt to changing regulations, embrace technology, and meet the expectations of a workforce that increasingly demands fairness and transparency as standard.
The question isn’t whether tronc schemes have a future. They absolutely do. The question is what that future looks like, and how you can position your business to stay ahead.
The regulatory direction of travel
The Employment (Allocation of Tips) Act 2023 wasn’t the endpoint. It was the starting line.
The Employment Rights Act 2025 adds new layers
The Employment Rights Act 2025 received Royal Assent in December 2025, and whilst many provisions are still being phased in, the direction is clear. Worker consultation isn’t optional anymore.
From October 2026, employers will be legally required to consult with trade union representatives, elected worker representatives, or workers directly before producing or revising their written tips policy.
This formalises what good employers should already be doing. But it also creates an enforcement mechanism. Businesses that make unilateral decisions about tip distribution without genuine consultation will face challenges.
The Act also strengthens protections against unfair dismissal and discrimination, making it even more important that your tronc scheme operates transparently and fairly. A worker who believes they’ve been treated unfairly in tip allocation now has multiple routes to challenge it, and the burden of proof increasingly falls on employers to demonstrate fairness.
The Fair Work Agency is coming
The government has committed to establishing a Fair Work Agency, bringing together enforcement of employment rights, National Minimum Wage compliance, and health and safety under one roof.
Whilst details are still emerging, the intention is clear. There will be more enforcement capacity, more coordinated investigations, and greater consequences for businesses that cut corners on worker rights.
For tronc schemes, this means HMRC compliance on one side and employment tribunal compliance on the other, all potentially subject to coordinated scrutiny.
The days of hoping nobody notices if your scheme isn’t quite right are over.
Increasing worker awareness and willingness to challenge
Perhaps the biggest shift isn’t in the legislation itself but in worker attitudes. Employment rights are being talked about more openly. Workers know what they’re entitled to.
Social media amplifies concerns about unfair practices faster than ever. One disgruntled employee posting about unfair tip distribution can damage your reputation and recruitment pipeline overnight.
Workers are increasingly willing to challenge practices they consider unfair, and they have the legal tools to do it. The future belongs to businesses that embrace transparency and fairness proactively, not those forced into it by complaints.
Technology is transforming tip management
The administrative burden of running a compliant tronc scheme has always been significant. The new legislative requirements have made it even heavier. Technology is rapidly becoming the only practical way to manage this complexity at scale.
- Digital tipping platforms
- Greater integration with other systems such as Time and Attendance and payroll software
- Automated rule-based allocation
- Compliance reporting
- Improved employee information and communication
Changing workforce expectations
The workers entering hospitality today have different expectations from those of five or ten years ago. Understanding these shifts is crucial for building tronc schemes that attract and retain great people.
Transparency as standard
Younger workers, particularly, expect transparency in all aspects of employment. They want to know how decisions are made, why rules exist, and whether they’re being treated fairly relative to colleagues.
A tronc scheme that operates as a black box – where workers receive tips but don’t understand how allocations are calculated – increasingly won’t be acceptable. The future belongs to schemes where every worker can access clear information about the distribution method, their personal allocations, and the reasoning behind decisions.
This isn’t just about compliance with the Act’s record-keeping requirements. It’s about meeting cultural expectations.
Fairness that goes beyond legal minimums
Complying with the Employment (Allocation of Tips) Act is table stakes. But forward-thinking businesses are going further.
Workers expect recognition for their contribution regardless of their role. Kitchen staff who never see a customer face-to-face still enable the experience that generates tips. Cleaning crews create the environment customers enjoy.
The most successful tronc schemes in the future will be those that genuinely recognise everyone who contributes, not those that grudgingly distribute to back-of-house staff because the law requires it.
Voice and influence
The Employment Rights Act 2025’s consultation requirements reflect a broader shift. Workers want a say in decisions that affect them.
Businesses that involve staff genuinely in shaping tronc allocation methods, review distribution rules regularly with worker input, and create clear channels for raising concerns will have a significant advantage in recruitment and retention.
This participation creates ownership. When staff have helped design the tronc scheme, they trust it more and are more likely to stay.
Multi-site operations face unique challenges
If you’re running one restaurant, managing a tronc scheme is complex but achievable. If you’re operating ten, twenty, or fifty sites, the challenge multiplies exponentially.
Consistency across locations
Workers talk. If tronc allocation differs significantly between sites without clear justification, you’ll face questions about fairness.
The future of multi-site tronc management requires standardised policies applied consistently, clear documentation demonstrating equal treatment, systems that can handle variations (different roles, different operational patterns) whilst maintaining fairness principles, and centralised oversight that spots
anomalies before they become complaints.
Scalable administration
Manual tronc administration doesn’t scale. As your business grows, the administrative burden grows faster.
Professional Troncmaster services become essential for multi-site operators. You need robust systems that work across all locations, expert oversight that ensures consistency, documentation that would satisfy scrutiny at any site, and capacity to handle the complexity without drowning your operations team.
We’re increasingly seeing large hospitality groups centralise their tronc management through specialist providers precisely because they recognise that in-house solutions don’t scale sustainably.
Recruitment and retention advantages
In competitive labour markets, having a reputation for fair, transparent tip distribution across all locations is a genuine competitive advantage.
Workers choosing between similar jobs will consider tip practices. Those choosing whether to stay or move will factor in whether they trust their tips are handled fairly.
For growing hospitality businesses, a robust tronc scheme isn’t just a compliance requirement. It’s a talent strategy.
The rise of hybrid models
Traditional tronc schemes pooled and redistributed tips. But the future might be more nuanced, with hybrid approaches combining different distribution methods to balance fairness, worker preferences, and operational reality.
Some businesses are moving toward point-based allocation, where workers earn points for factors like hours worked, role type, seniority, and performance, then tips are distributed proportionally to total points accumulated.
These systems can be more flexible than simple equal distribution or pure hours-worked models. They can recognise different contributions without creating a perception of unfairness.
However, they also require clear documentation, transparent communication about how points are allocated, and robust systems to track everything accurately..
Preparing for greater scrutiny
If there’s one certainty about the future, it’s that compliance standards will continue to rise and enforcement will increase.
Tribunal claims will become more common
As workers become more aware of their rights under the Employment (Allocation of Tips) Act, tribunal claims about unfair allocation will increase.
Early case law will establish precedents about what “fair” means in specific contexts. Businesses that wait to see how these cases develop risk finding themselves on the wrong side of emerging standards.
Being ahead of the curve – demonstrating exemplary transparency, robust worker consultation, and objective allocation methods – creates a defensive position if challenges arise.
HMRC enforcement around NI exemptions
The National Insurance savings from properly structured tronc schemes are significant. This makes them attractive to businesses.
HMRC knows this and will continue scrutinising schemes to ensure they’re genuinely independent of employer control. If your Troncmaster isn’t truly independent, HMRC can withdraw the NI exemption and charge back contributions plus penalties.
Future-proofing means ensuring genuine independence, maintaining meticulous documentation, and being able to demonstrate that allocation decisions aren’t controlled by the employer.
What does this mean for your business?
Looking at these trends, what should hospitality businesses be doing now to prepare for the future of tronc schemes?
Invest in robust systems and expertise
Whether you’re building in-house capability or outsourcing to specialists, you need systems and expertise that can handle increasing complexity.
Manual spreadsheets and informal arrangements won’t cut it. Technology-enabled, compliance-focused approaches are becoming essential.
For many businesses, professional Troncmaster services represent the most practical path forward. The regulatory complexity and administrative burden are only increasing. Specialists who focus on this full-time are better positioned to stay ahead than operations teams juggling multiple priorities.
Embrace transparency proactively
Don’t wait for regulations to force transparency. Build it into your culture now.
Make your tronc allocation method clear to everyone. Involve workers in reviewing and refining it. Create easy access to records. Welcome questions and concerns.
Transparency isn’t a cost. It’s an investment in trust, which pays dividends in retention and morale.
Future-proof through worker involvement
The consultation requirements in the Employment Rights Act 2025 are coming whether you’re ready or not.
Start building worker consultation into your review processes now. Establish representative bodies or consultation forums. Document how worker input shapes decisions.
When the legal requirement kicks in, you’ll already be doing it. And your workers will trust the scheme more because they helped create it.
Think beyond compliance minimums
The most successful hospitality businesses in five years won’t be those that grudgingly comply with the Employment (Allocation of Tips) Act. There will be those who embrace the principles behind it.
Genuine fairness in tip distribution, meaningful recognition of everyone who contributes, and transparent communication about how it all works create a competitive advantage in talent markets.
Review and update regularly
Tronc schemes aren’t set-and-forget. Regulations evolve, case law develops, and workforce expectations shift.
Build regular reviews into your calendar. At least annually, assess whether your scheme still meets legislative requirements, remains fair given any operational changes, and aligns with current best practices.
This ongoing attention prevents the costly situation of discovering you’re non-compliant only when someone challenges you.
The future of tronc schemes in UK hospitality is secure. Tips remain an important part of hospitality compensation, and properly structured tronc schemes remain the most tax-efficient way to handle them whilst meeting legal requirements.
But the tronc schemes that succeed will look different from those of the past. They’ll be more transparent, more technology-enabled, more worker-involved, and more professionally managed.
The regulatory direction is clear. Worker expectations are rising. Technology is transforming what’s possible. The question isn’t whether to adapt, but how quickly and effectively you do it.
At Tips and Troncs, we’re working with hospitality businesses across the UK to build tronc schemes that don’t just meet today’s requirements but are ready for tomorrow’s challenges. Because getting this right isn’t just about compliance. It’s about creating sustainable competitive advantage in an industry where great people make all the difference.
Ready to future-proof your tronc scheme?
Get in touch with the Tips and Troncs team today.