The Employment (Allocation of Tips) Act has been in force since October 2024. Eighteen months in, most operators have written a policy, set up a tronc, and updated their card-tip workflow. The basics of the regime are well understood, even if the implementation isn’t always tidy.

What’s less talked about is everything that’s happened since. The government opened a consultation in early 2026 to look at how the Act is bedding in, and it closed on 1 April. The Fair Work Agency stood up the same month as a single regulator for several strands of employment law, including tipping. And a tribunal decision late last year quietly redrew the line on what counts as a “genuinely independent” tronc — with consequences a lot of operators haven’t worked through yet.

For anyone running online orders, this matters specifically. The Act was written with table service in mind, and the gap between the law and how an online checkout works has always required interpretation. The 2026 changes don’t close that gap — but they raise the cost of getting it wrong.

This post is about where things stand now, what’s coming, and what the practical implications are for businesses taking tips through an online ordering site.

The state of play, eighteen months in

To recap the bits that haven’t changed:

• 100% of qualifying tips must go to workers, with no employer deductions beyond statutory tax and National Insurance.
• Allocation must be fair, under a written policy that’s available to workers.
• Tips must be paid by the end of the month following receipt — March tips by 30 April, no later.
• Records must be kept for three years, and workers can request records relating to their share once a year.
• Tribunal claims can be brought within 12 months for allocation breaches and within three months for policy breaches.

What’s changed in practice is the level of expectation. In late 2024 there was room for “we’re working on it.” Eighteen months in, that defence is gone. Tribunals are now seeing cases. The Fair Work Agency has the power to investigate. The benefit of the doubt has expired.

The government’s own estimate is that the Act now transfers around £200 million a year from employers to workers that would previously have been retained. Whether your business is one of the ones that’s adjusted to that cost or one that’s quietly absorbed it without changing pricing is a question worth asking before someone else does.

What October 2026 brings

The biggest change ahead is a new duty to consult before introducing or amending a tipping policy. From October 2026, employers will have to consult with workers or their representatives whenever they make a material change to how tips are handled.

In practice, this means:

• A new policy can’t be rolled out unilaterally. If you’re moving from no formal policy to a written one (still common in smaller operations), the consultation duty applies.
• Changes to allocation formulas need consultation. Adjusting how tips split between front of house, kitchen and drivers is a material change.
• Adding or removing a tronc arrangement counts. As does changing the troncmaster.
• Changes triggered by operational shifts — bringing in delivery, changing the ratio of online to in-store orders, adding a service charge — need to be reflected in the policy, which means consultation.

The mechanics of the consultation duty will be set out in the regulations, but the broad pattern follows existing employment-law consultation: meaningful, in good time, with workers’ input genuinely considered. It’s not a tick-box exercise, and tribunals are unlikely to treat it as one.

If you’re planning any change to how you handle tips — particularly anything triggered by growth in online ordering — it’s worth getting the change in place before October 2026, or being ready to do it the longer way after.

The Fair Work Agency: enforcement gets sharper

The Fair Work Agency stood up in April 2026 as a consolidated regulator covering several strands of employment-rights enforcement, including the Tipping Act. Before the FWA, enforcement was diffuse — workers could bring tribunal claims, but proactive investigation was limited.

The FWA has broader powers and a remit to investigate at sector level, not just in response to individual complaints. For hospitality, the practical effect is that being non-compliant is no longer a low-probability risk. A worker complaint can trigger an FWA inspection, and an FWA inspection isn’t limited to the original complaint — it can look at the whole operation.

Tribunal awards remain capped at £5,000 per worker for financial loss caused by allocation or policy breaches. That sounds modest until you multiply it by a team of 15. A small takeaway with a poorly-implemented tronc and a couple of unhappy staff can face a five-figure exposure, plus the time and cost of defending the claim.

The Palanki case and what it changed

The case that hospitality lawyers have been talking about most over the last few months is Palanki v The Big Table Group, involving a Las Iguanas employee. The headline finding was that tronc payments in that case were “normal remuneration” — meaning they had to be included in holiday pay calculations rather than treated as separate payments outside the ordinary pay calculation.

The reasoning matters more than the outcome. The tribunal looked at how the tronc was actually operated, not just how it was described, and concluded it lacked genuine independence. Specific factors that counted against the business:

• No separate troncmaster bank account.
• No separate PAYE scheme.
• Tronc and wages presented together on the same payslip.
• Insufficient day-to-day independence between the troncmaster and management.

A lot of UK hospitality troncs share at least some of these features. Many operators set up a “tronc” as a payroll category rather than a genuinely independent arrangement, on the basis that it was simpler and the tax treatment looked the same. After Palanki, that simplification is now a risk: if your tronc isn’t independent in operation, the payments through it may be reclassified, which has implications for holiday pay, pension contributions, and other knock-on entitlements.

For online orders, this is particularly relevant. Online tips have always been more obviously “money coming through the till” than cash tips left on a table. If they’re being passed through a tronc that doesn’t look independent, the Palanki reasoning suggests they’re likely to be reclassified as normal pay, with everything that follows.

The fix is to review the tronc structure, not just the policy. If you’re running a tronc on the basis that it’s separate but in practice the troncmaster is the manager, the bank account is the company’s, and the payslip lumps everything together, the structure needs work.

What this all means for online ordering specifically

The online-orders-specific challenges haven’t gone away. They’ve just become more important to get right, because the enforcement and reputational consequences of getting them wrong are larger.

The tipping prompt at checkout

Online ordering platforms typically let you add a tip prompt at the basket or checkout screen. The design choices that mattered in 2024 still matter in 2026, and a few have become more pointed:

• Be explicit about who receives the tip. “Add a tip for the team” is acceptable. “Service charge” without explanation is increasingly problematic — under the consultation duty, you’ll need to be able to show staff what the labels mean and how the money flows.
• Don’t pre-select an amount. If a customer feels they had to actively decline a tip, the tip isn’t really discretionary, and the legal status of “discretionary” matters a lot under the Act.
• Make “no tip” a clear option. Hidden or hard-to-find decline options have started to attract complaints, and the FWA’s remit includes the worker-protection side of how tips are presented.

Allocation across online and in-store

The policy has to cover online and in-store consistently. A few patterns are emerging as the safer choices:

• Tips on collection or delivery orders to kitchen-only, where there’s no front-of-house involvement, allocated through the tronc on hours-worked or points basis.
• Tips on online dine-in orders (QR-ordering at table, for instance) follow the same allocation as a normal table tip.
• Tips on orders fulfilled by a third-party fleet driver either pass through to the fleet, or are clearly labelled at checkout as going to the kitchen, not the rider.

The consultation duty coming in October 2026 makes it worth getting this right now. If your current policy is informal or silent on online orders, formalising it before October avoids triggering the consultation requirement for what should be a basic clean-up exercise.

Records that survive an audit

The FWA can ask for records. So can a worker. So can a tribunal. For online tips specifically, this means:

• Per-order tip records, exported regularly out of your ordering platform and stored somewhere durable.
• Per-worker allocation records, showing how each worker’s share was calculated.
• Payment records, showing when the tip was received and when it was paid out.

The three-year retention requirement applies to all of these. If your ordering platform is the only place this data lives, you have a problem — platforms change, accounts get reset, exports get harder. Build a monthly export into your finance process and keep the data somewhere you control.

Service charges on online orders

A clarification that’s worth repeating because it still trips people up: a mandatory service charge added to an online order is not a tip in the discretionary sense. It becomes part of the price of the meal, subject to VAT in the normal way, and the worker-allocation rules of the Act apply differently to mandatory charges than to discretionary ones.

The cleanest position for most online operators is to not use mandatory service charges at all. Use a discretionary tip prompt instead. It’s simpler, the tax treatment is clearer, the customer experience is better, and the allocation rules are unambiguous.

What to do in the next six months

If you take tips on online orders and you haven’t reviewed the setup since the Act came in, three things are worth doing before October:

Audit the tronc. Is it genuinely independent in operation, or only on paper? Separate bank account, separate PAYE scheme, troncmaster who isn’t the manager? If not, get advice on what would need to change, and budget for the work.

Review the written policy. Does it cover online orders explicitly? Does it explain how tips flow from customer to worker? Does it differentiate between dine-in, collection, and delivery? If it’s silent on any of these, it needs updating — and it’s easier to update now than after the consultation duty kicks in.

Build the records workflow. Monthly export from the ordering platform, monthly tronc allocation, monthly payment, monthly reconciliation. Stored somewhere durable. Available to workers on request within the four-week window.

None of this is glamorous. It’s also not optional in any meaningful sense — the enforcement regime is now real, the tribunal precedents are starting to land, and the consultation duty changes the calculus on every future policy decision.

The shorter version

The Act hasn’t changed. What’s changed is everything around it: a new regulator with real powers, a new consultation duty coming in October, and a tribunal decision that’s raised the bar for what counts as a “real” tronc.

For online ordering operators, the practical agenda is unglamorous but clear. Get the policy in writing if it isn’t already. Make sure the tronc is independent in operation, not just on paper. Build a records workflow that survives an audit. Use discretionary tip prompts, not mandatory service charges. Allocate fairly between front of house, kitchen, and drivers — and be ready to defend the allocation in detail.

The £200 million a year that the Act now redirects to hospitality workers is a number that’s quoted as a success. From inside the industry, it’s also a number that’s coming out of margins that were thin to begin with. Operators who treat the regime as a compliance afterthought are the ones who get caught out. The ones who built it into pricing and process eighteen months ago are doing fine.

Most of the work to be done now is closing the gap between those two groups. If you’re not sure which one you’re in, that’s probably the answer.