
Service Charges in
UK
Restaurants
Service charges have become a standard feature of dining out in the UK, but many customers remain unclear about their legal obligations when it comes to paying them. Are they compulsory? And what happens if they are not clearly stated on the menu or on display?
What UK Law Says
In this article, we provide a breakdown of what UK law says about service charges and cross-reference the relevant sections of the laws to give consumer/diners a clearer understanding of their rights.
What Is a Service Charge?
A service charge is an additional amount added to a restaurant bill, typically as a percentage of the total cost of the meal, often ranging from 10% to 15%. This is distinct from tipping, which is discretionary and left at the customer’s discretion. Service charges, however, can be automatically added, leaving some diners confused about whether they have a choice in the matter.

The Legal Framework on Service Charges in the UK
There is no law in the UK that compels restaurants to charge a service fee. However, there are specific legal principles and regulations that govern how these charges should be communicated to customers, and under what circumstances they must be paid.
Transparency and Consumer Protection
Under the Consumer Protection from Unfair Trading Regulations 2008, restaurants are required to ensure that any charges added to a bill are clear and transparent. Section 5 of the regulations states that businesses must not engage in unfair commercial practices, including failing to disclose important information that could influence a consumer’s decision to buy a product or service. This means that if a service charge is added to the bill, it must be clearly stated on the menu, a sign in the restaurant, or at the point of ordering. If a customer is not informed about the charge in advance, it could be considered a misleading practice, violating the regulations.
Compulsory vs. Discretionary Charges
While restaurants are allowed to add a service charge to bills, they are not allowed to make it compulsory unless it is explicitly communicated. The Consumer Rights Act 2015 provides further clarity here, particularly in its provisions regarding “contract terms.” Section 62 of the Act outlines that any terms of a contract (in this case, the terms of dining at a restaurant) must be clear, fair, and transparent.

If a service charge is optional, the customer should be given the opportunity to choose whether to pay it or not. If it is mandatory, this must be clearly communicated ahead of time. If a service charge is not mentioned on the menu or in a visible location, customers cannot be forced to pay it once they receive the bill. This protects consumers from hidden costs and ensures that they are aware of all charges before they agree to dine.
Handling of Service Charge Payments
Another key concern revolves around the distribution of service charge payments. While UK law does not mandate how restaurants must handle service charge funds, there are still rules regarding fair pay for employees. According to the Employment Rights Act 1996, employees must receive their agreed-upon wages, and if a service charge is meant to be distributed to staff, it should be done transparently. Restaurants that fail to pass on service charges to employees could be in breach of their obligations to fairly compensate workers.
How CPB Can Help with Unjustified Restaurant Service Charges
If you encounter any issues with service charges at restaurants, the Consumer Protection Bureau (CPB) is here to support you. Our goal is to ensure your rights are upheld and you receive fair treatment. Here's how we can help:
1. Dispute Resolution
- Mediation with Restaurants: We assist in resolving disputes by communicating directly with the restaurant on your behalf to clarify or contest unfair service charges.
- Formal Complaints: If the issue remains unresolved, we guide you through filing formal complaints to higher authorities or consumer bodies.
2. Legal Guidance
- Understanding Your Rights: We provide clear information about your rights under the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015, ensuring you know how to handle unfair practices.
- Challenging Unfair Charges: If a restaurant imposes a service charge without disclosure, we help you challenge the validity of the charge based on legal provisions.
3. Refund Assistance
- Recovering Unjust Charges: We work with you to secure refunds for charges that were applied unfairly or without proper communication.
- Ensuring Transparency: We ensure restaurants follow transparent policies for refunds and clearly communicate whether service charges are discretionary or mandatory.
4. Consumer Awareness
- Educational Resources: CPB provides easy-to-understand resources to educate you about restaurant practices and how to avoid common issues with service charges.
- Regular Updates: Stay informed with our updates on changes to consumer laws, common unfair practices, and how to handle disputes effectively.
5. Reporting Unethical Practices
- Scam Reporting: If you suspect fraudulent activity or unethical practices in restaurants, CPB can investigate and report them to the relevant authorities.
- Advocacy for Better Practices: We advocate for greater transparency in restaurant billing practices to protect all consumers.
Contact Us
If you’ve experienced unfair service charges or have questions about your rights, reach out to us:
- +44 (0)2035854002
- info@consumerprotectionbureau.co.uk
At CPB, we are committed to helping you enjoy your dining experience without unnecessary stress or unfair treatment. Let us be your partner in ensuring fairness and transparency in all consumer dealings.
What Happens If There’s No Mention of a Service Charge?
If a service charge is not mentioned at any point before the bill is presented, the customer is generally not required to pay it. The Unfair Terms in Consumer Contracts Regulations 1999 protects consumers from unfair or hidden charges in contracts, making it clear that any charges added to a bill must be disclosed in advance. This means that if a restaurant adds a service charge without informing the customer beforehand, it could be seen as an unfair term.
What Should Diners Do?
If you are ever in doubt about a service charge, always ask the restaurant staff for clarification. They should be able to explain whether the charge is compulsory or discretionary. If a service charge is included automatically but was not made clear on the menu or in the restaurant, you are entitled to challenge it. Simply asking for it to be removed or reduced is your right, as outlined under the Consumer Protection from Unfair Trading Regulations 2008.
1. Consumer Protection from Unfair Trading Regulations 2008
- This legislation governs the fairness of commercial practices towards consumers. It requires businesses to provide clear, accurate, and transparent information, including the total price to be paid by consumers for goods and services.
- Section 5 specifically addresses "misleading actions" and "misleading omissions," meaning businesses must not hide or fail to disclose important information like service charges. If a service charge is applied, it must be clearly communicated to the consumer before the transaction takes place.
- You can find the full text of the regulations here: Consumer Protection from Unfair Trading Regulations 2008.
2. Consumer Rights Act 2015
- The Consumer Rights Act 2015 sets out the general rules about how businesses must treat consumers and lays down principles regarding fairness and clarity in contracts, including restaurant transactions.
- Section 62 specifies that contract terms (like the service charge in a restaurant) must be fair, transparent, and communicated clearly. If a restaurant includes a service charge, it must make it clear whether it’s compulsory or discretionary before the customer is bound by the contract (e.g., agreeing to dine there).
- You can access the full text of the Act here: Consumer Rights Act 2015.
3. Unfair Terms in Consumer Contracts Regulations 1999
- These regulations protect consumers against unfair contract terms, particularly when they are not transparent or are imposed without clear prior agreement.
- Regulation 5 outlines that terms not properly communicated or disclosed to consumers are deemed unfair and unenforceable. If a service charge is not disclosed on a menu or prior to presenting the bill, the consumer is not legally obliged to pay it.
- You can access the full text of the regulations here: Unfair Terms in Consumer Contracts Regulations 1999.
4. Employment Rights Act 1996
- This act ensures that employees are paid fairly for the work they do. While it doesn’t specifically regulate service charges, it’s relevant when discussing the distribution of tips and service charges. Employees must be paid at least their agreed wages, and if service charges are part of that agreement, they must be handled transparently.
- You can access the full text of the Act here: Employment Rights Act 1996.
By referencing these key regulations, customers can better understand their rights and take action if they feel they’ve been unfairly charged. Always ensure service charges are clearly displayed or mentioned before your bill is presented, as required by the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015.