Service charge on the Christmas party bill: when you can say no, and the 2024 tips law

What's happening

The Christmas party season is starting, and many restaurants add a service charge to bills for bigger tables. Whether you have to pay it depends on whether it's optional or compulsory, and on how the price was shown to you when you booked. Since 1 October 2024, the law has also said where that money goes.

At a glance

• A discretionary service charge is optional. Which? says you're always entitled to refuse to pay one.
• A compulsory charge belongs in the price. The CMA's pricing guidance lists "mandatory cover or service charges at a restaurant" among the charges that must be included.
• Staff must get all tips and service charges, without deductions except in very limited cases such as tax.

Optional or compulsory?

Most service charges are described as "discretionary" or "optional", even when they're added to the bill automatically. Which? says "You're always entitled to refuse to pay these", though staff may ask why.

A compulsory charge is different. Since 6 April 2025, section 230 of the Digital Markets, Competition and Consumers Act 2024 has required the price you're shown to include any charges you'll necessarily have to pay. The Competition and Markets Authority's price transparency guidance (CMA209) gives "mandatory cover or service charges at a restaurant" as an example, and says that showing a charge separately, or calling it a service, doesn't make it optional. So a restaurant that makes its service charge compulsory for groups should include it in the price it shows you, not spring it on you with the bill.

Which? says that to refuse a compulsory charge, "you may be expected to prove that you received very poor service." Under section 49 of the Consumer Rights Act 2015, a service must be carried out with reasonable care and skill. If it isn't, and it can't be put right, section 56 lets you ask for a price reduction.

Where the money goes

The Employment (Allocation of Tips) Act 2023 and its code of practice came into effect on 1 October 2024. Citizens Advice says employers "must pass on all tips to their workers", and that this includes service charges added to the bill, whether you pay in cash, by card or through an app. The code says tips must reach staff by the end of the month after the one in which you paid, and employers that often get tips must have a written tips policy.

So you don't need to pay a tip in cash to be sure staff get it. And a service charge is a tip: if it's on the bill, you don't need to add another one unless you want to.

A worked example

This is an illustration. Ten friends book a £45-a-head Christmas set menu. The food comes to £450, and the bill adds a 12.5% "discretionary" service charge of £56.25, making £506.25, or about £50.63 each. If the service was good, paying the charge is the simplest way to tip, and by law it goes to staff. If the drinks took an hour and a course never came, the group can ask for the charge to come off, or pay a smaller amount.

If the booking page had said the 12.5% was compulsory for groups, the CMA's guidance means the price per head should have been shown with the charge included, at about £50.63 rather than £45.

What to do now

1. Ask when you book whether there's a service charge for your group size, and whether it's optional.
2. Check the bill before you split it, so nobody tips on top of a service charge by mistake.
3. If service was poor, say so at the table and ask for the charge to be removed or reduced.
4. If a compulsory charge wasn't in the price you were shown, raise it with the manager, and report it to the Citizens Advice consumer helpline on 0808 223 1133. That number is for England, and advisers can pass complaints on to Trading Standards.

Questions

Do staff get more from a cash tip? Not under the law. Since October 2024, employers must pass on tips however you pay them.

Can I find out how a restaurant shares tips? Employers can choose to share their written tips policy with customers, but the code says they don't have to. Staff can ask to see their employer's tipping record, which covers the last 3 years. You can always ask the manager.

Ways to save

If you're organising the party, check the chains' own offers first. Our wagamama page lists 20% off the food bill for Blue Light Card and Defence Discount Service members plus five guests. Our PizzaExpress page has free Dough Balls or a side when you join PizzaExpress Club, and our Nando's page has a free starter when you join Nando's Rewards. Check that a deal works on a group booking before you count on it.

When you shop through Voucher Magpie, part of the commission the shop pays us goes to the charity or club you pick. You pay the same price.

Sources: Which?: Guide to tipping abroad 2026, with UK service charge rules, 18 Jun 2026, CMA: Unfair commercial practices: price transparency (CMA209), DMCC Act 2024, section 230, Consumer Rights Act 2015, section 49, Consumer Rights Act 2015, section 56, Citizens Advice: Check what tips and service charges you're entitled to, 8 Nov 2026, GOV.UK: Code of practice on fair and transparent distribution of tips, Citizens Advice: If you need more help about a consumer issue