One of the most contentious recent issues for the industry has been to answer two questions: is the discretionary service charge viewed as part of an employee's wages, and how is it distributed?

The government, in new legislation to be introduced on October 1, has provided the answer to the first: after that date, restaurants cannot use the proceeds of the discretionary service charge to make up the national minimum wage - a practice that has traditionally been perfectly legal.

The BHA recognizes that many customers do not understand that the service charge legally belongs to the establishment; others are also under the sometimes mistaken impression that all the money raised through the discretionary service charge goes directly to the staff. This is not always the case.

As a result, confusion has reigned and in the last few months, the BHA, after discussions with the Department for Business, has produced a code of practice that will clarify the situation. The code appears in full on the BHA website.

The new code suggests that every establishment imposing a service charge tells the customer exactly how the proceeds are distributed. As payment is normally paid through the establishment's payroll system, some restaurants deduct a certain amount for administration costs. If that is the case, the customer should be told how much is deducted.

The code also suggests that if the restaurant keeps any other sum from the service charge, that amount should also be stated.

Finally, it should be made clear how the proceeds are distributed and whether, for example, they are controlled by a representative of the employees through a tronc system.

If every restaurant in the country which imposed a service charge - and that includes hotels and pubs - followed this code, the industry would be totally transparent and would be above the criticism that has currently been leveled at it by consumer groups and the government. Customers would know exactly what happened to the money collected by the service charge, how it was distributed and how much (if any) the restaurant retained.

There's no doubt the industry has been damaged by recent criticism in this area and the code - if widely supported - will do much to reassure critics that restaurateurs are determined to regain public confidence. The problem, of course, is that there are nearly 30,000 restaurants in the UK and three times the number of pubs and hotels - though not all impose a service charge It will take time for the industry as a whole to take note.

The BHA has made a start. Many members have already provided this information for customers for a number of years. Others have already adopted the code. But there's little doubt that government is also interested in how many establishments follow suit.

If ministers start to accuse the industry of backsliding, I'm sure they will want to consider taking a statutory approach. Yet another regulation! The industry will want to avoid that. It can, by adopting the code. It's in our hands.