Restaurants and hotels should be legally required to tell customers how service charges and tips are distributed among staff.

That’s the message from the British Hospitality Association in a new initiative proposed to UK business secretary Sajid Javid.

The BHA – which represents 40,000 hospitality establishments in the UK – wants the Government to introduce legislation to make businesses reveal exactly what happens to the ‘extras’ customers pay at the end of a meal.

“For us it’s all about transparency,” said Ufi Ibrahim, chief executive of the BHA, which has outlined the proposal in a letter to the Business Secretary.

“Although restaurants are legally entitled to deduct administration costs from service charges, for example, we think it’s important the customers understands exactly how much is deducted and why.

“Customers should be able to reward good service and know where their money ends up and how much of it goes to the staff.”

Many restaurants and hotels have signed up to the British Hospitality Association’s voluntary code of transparency on tips and service charges.

But now the BHA wants to make it a legal requirement.

The BHA wants to end confusion among customers about who is entitled to service charges.

Since 2009 it has been illegal for restaurant owners to use tips and service charges to bring wages up to the national minimum wage.

Service charge usually goes into a ‘Tronc’ – which is then distributed among waiters, front of house and the kitchen team – allocated according to arrangements agreed by the staff.