Latest inflation figures, new rules on the distribution of hospitality tips, plus claiming Child Benefit for students in further education
Today we take a look at the latest inflation figures, the upcoming Employment (Allocation of Tips) Act 2023 and guidance regarding how to claim Child Benefit if your child is aged between 16 and 19 and still in full-time education.
Inflation falls to 2%
Figures released by the Office of National Statistics show that the Consumer Prices Index (CPI) for May 2024 was 2%. This is a reduction from the 2.3% assessed in April and means that inflation has hit the Bank of England’s target rate for the first time in nearly 3 years.
The main reason for the drop is food, where prices are falling now but were rising a year ago. However, it is worth noting that food prices are generally still 25% higher than they were at the beginning of 2022.
The main upward pressure on inflation currently is coming from petrol since prices are rising whereas they were falling a year ago.
The fall in inflation doesn’t mean that prices overall are coming down, just that they are rising more slowly.
The Bank of England met on Thursday last week to discuss their interest base rate. This has been set at 5.25% since August 2023 and they decided to maintain that rate. This means no relief yet for borrowers, but in view of the inflation news, a reduction in the base rate is expected within the next few months.
See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
New rules on distributing tips: Understanding the Employment (Allocation of Tips) Act 2023
On 1 October 2024, the Employment (Allocation of Tips) Act 2023 will come into effect, introducing significant changes to how tips are managed and distributed in the hospitality industry.
This legislation aims to improve fairness by mandating that all tips, gratuities, and service charges are allocated fairly among employees. The new rules address longstanding concerns about the retention and distribution of tips by employers, ensuring transparency and fairness.
Summary of the New Rules
- Fair Distribution: Employers must distribute all tips, gratuities, and service charges fairly and equitably among workers. This includes both cash and card tips. The distribution has to be fair and transparent with due regard to a Code of Practice and can include a tronc arrangement.
- No Deductions: Employers are prohibited from making any deductions from tips, including administrative fees. The only exceptions are those required by law (e.g., tax).
- Transparency: Employers must clearly communicate their tipping policies to employees and customers, ensuring transparency in how tips are allocated.
- Record-Keeping: Employers are required to keep detailed records of all tips received and distributed for a period of three years. These records must be made available to employees upon request.
- Written Policy: A written policy outlining the distribution of tips must be in place and accessible to all staff members.
- Service Charges: Any service charges added to bills must be treated as tips and distributed accordingly.
Impact on Employers
If you are an employer affected by the rules, you will likely need to make some changes in how you manage tips. It will be crucial that you comply with these regulations to avoid potential penalties and to maintain a fair working environment.
Here are the key impacts with some suggestions for procedures that affected employers will need to consider:
- Review and Update Tipping Policies: Employers will need to review their current tipping policies and make sure they line up with the new rules. They will need to establish a clear and equitable distribution method that is communicated to all employees.
- Implement Transparent Systems: Employers should implement transparent systems for tracking and distributing tips. This might involve using software solutions that automatically record and allocate tips based on predefined criteria.
- Employee Training: Training sessions should be conducted to inform employees about the new rules and how tips will be managed. This ensures everyone is aware of their rights and the procedures in place.
- Maintain Accurate Records: Employers must establish robust record-keeping practices to document all tips received and distributed. These records should be maintained for at least three years and be readily accessible for inspection by employees or regulatory bodies.
- Communicate with Customers: Clearly communicate tipping policies to customers, possibly through notices on menus or at the point of sale. This transparency helps manage customer expectations and ensures they understand how their tips will be used.
- Regular Audits: Conduct regular audits to ensure compliance with the Act. This helps identify and rectify any discrepancies or non-compliance issues promptly.
By implementing these procedures, employers can not only comply with the new rules but also foster a fairer and more transparent working environment. This can enhance employee satisfaction and trust, ultimately benefiting the overall business.
If you need any help with the new rules or applying the Code of Practice, please feel free to get in touch and we will be happy to help you.
Don’t be caught by false claims on business rates appeal deadlines
The Valuation Office Agency (VOA) has issued a warning about false claims being made about the deadline for appealing the 2023 list for business rates.
Some are claiming that the deadline is 30 June, however this is not true. Generally, you are able to appeal your property valuation on the 2023 list at any time until March 2026.
If an agent contacts you trying to pressure you to make a decision or sign a contract; makes claims about ‘unclaimed credits’; says they are acting on behalf of the VOA; or demands large sums of money upfront, then VOA advise you to be cautious.
It is not necessary to use an agent, but if you choose to do so then the VOA provide a checklist you can use to select one.
While the vast majority of agents are reputable and will give you a good service, there are a small minority acting in bad faith.
The VOA advise that if you have any concerns about having been potentially misrepresented by an agent, please send any evidence to .
See: https://www.gov.uk/government/news/warning-of-false-claims
Mackerel fishing deal struck with Norway and the Faroe Islands
Last week, the UK agreed a deal with Norway and the Faroe Islands that will help reduce the fishing pressure on mackerel.
The deal gives access to Norway and the Faroe Islands to be able to fish some of their quota in the UK zone. In exchange for this, an annual transfer of some of their quota will be made to the UK.
It is hoped that this deal will be stepping-stone to a more long-term quota-sharing arrangement between the nations fishing these waters.
Don’t lose out on Child Benefit available to children in further education
Parents of children aged between 16 and 19 years of age and continuing their education or training after their GCSEs can extend the Child Benefit they receive.
If this is true for you, then HM Revenue & Customs (HMRC) should be in the process of writing to remind you about this. On their letter, it will include a QR code. If you scan this and follow the link, you will be directed to a page on GOV.UK that will allow you to easily update your claim.
You should receive this letter by 17 July. If for some reason, you have not received a letter by then, you can also make the claim via GOV.UK yourself or by using the HMRC app. You will need a Government Gateway user ID and password to be able to do this.
Child Benefit can be worth £1,331 a year for your first or only child, and up to £881 a year for each additional child. Payments will automatically stop on 31 August after the child has turned 16 unless the parents take action to renew their claim.
The payments can be extended if your child is studying full time in approved non-advanced education. This includes:
- A levels or Scottish Highers;
- International Baccalaureate;
- Home education – generally only if started before the child turned 16, unless you have a statement of special educational needs that was assessed by your local authority;
- T levels; and
- NVQs, up to level 3.
The following unpaid approved training courses also qualify for extending your claim:
- Wales: Foundation Apprenticeships, Traineeships or the Jobs Growth+ Wales scheme;
- Northern Ireland: PEACEPLUS Youth Programme 3.2, Training for Success or Skills for Life and Work; and
- Scotland: Employability Fund programme and No One Left Behind.
If you have any difficulties with extending your claim or would like help in making the claim, please feel free to contact us. We will be happy to help you!
See: https://www.gov.uk/government/news/dont-lose-out-extend-child-benefit-for-your-16-to-19-year-old