Margins you can seebefore the week is over.
Restaurants, cafes and bars live on thin margins and fast cash. We give you weekly numbers on sales, wages and gross profit, run tronc and payroll properly, and keep VAT on food and drink right.
What makes your finances different.
Tips have their own rules
Since October 2024 the Employment (Allocation of Tips) Act requires all tips to be passed to staff. A properly run tronc keeps them free of National Insurance; done informally, they are not.
VAT is item by item
Hot food, cold takeaway, eat-in, alcohol and delivery are taxed differently. Till setups that get this wrong overpay or underpay every day.
Staff costs dominate
Shift patterns, holiday pay on variable hours, the National Living Wage at £12.71 from April 2026 and employer's National Insurance at 15% make payroll the biggest line after food cost.
Cash moves daily
Supplier payments, card settlements, delivery platform payouts and cash takings need reconciling constantly. Monthly accounts arrive too late to change anything.
What we do for you.
- Set up Xero or QuickBooks with your till, card terminal and delivery platforms feeding in
- Produce weekly flash reports: sales, gross profit, wage percentage and cash
- Run payroll for hourly and salaried staff, including holiday accrual and auto-enrolment
- Operate a compliant tronc scheme so tips are distributed without National Insurance
- Prepare VAT returns with correct treatment of eat-in, takeaway, alcohol and delivery sales
- Account for stock and calculate real gross margin on food and drink
- Prepare year-end accounts and Corporation Tax, with capital allowances on fit-out and kitchen equipment
- Advise on business rates relief, premises costs and opening a second site
The tax rules that matter here.
- VAT on food and drink
- Food eaten on the premises, hot takeaway food and all alcohol are standard rated at 20%. Cold takeaway food such as sandwiches is zero rated. Delivery through a platform is a sale by you at the normal rate, with the platform's commission a cost.
- Tips and tronc
- Tips allocated through an independent tronc are free of employer and employee National Insurance, though still subject to income tax. Tips paid by the employer at its discretion attract full National Insurance.
- National Living Wage and employer NI
- From 1 April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds and £8 for under-18s and apprentices. Employer's National Insurance is 15% on earnings above £5,000, reduced by the £10,500 Employment Allowance for eligible employers.
- Business rates
- Retail, hospitality and leisure properties in England receive a permanently lower business rates multiplier from April 2026 for rateable values under £500,000. Small business rate relief gives 100% relief for rateable values up to £12,000.
- Fit-out and equipment
- Kitchen equipment, furniture and most of a fit-out qualify for the Annual Investment Allowance. Integral features such as ventilation and electrical systems qualify at 6% a year, or at 100% within the Annual Investment Allowance.
Rules and rates are those in force for 2026/27 at the time of writing. Check your own position before acting.
Run your own numbers first.
- VAT calculator
Add VAT to a net price, or strip it out of a gross figure.
- Corporation Tax calculator
Corporation Tax on your profit, including marginal relief.
- Employer NI calculator
Employer's National Insurance and the true cost of a hire.
Worth asking.
Report weekly rather than monthly, track gross profit and wage cost as a percentage of sales, run a compliant tronc, and get item-level VAT right on the till. Those four things decide whether a restaurant makes money, and a general accountant working from quarterly bank statements will miss all of them.
All tips and service charges must now be passed to workers in full. If they are distributed by an independent troncmaster under a tronc scheme, no National Insurance is due, only income tax through payroll. If the employer decides who gets what, employer and employee National Insurance applies. We set up and run tronc schemes.
Hot takeaway food and drink is standard rated at 20%. Cold takeaway food, such as sandwiches and salads, is zero rated. Anything eaten on the premises is standard rated regardless of temperature, and alcohol is always standard rated.
Weekly for the figures that matter: sales by day, gross profit, wages and cash. Monthly management accounts follow, with the VAT and payroll liabilities shown so you can see what is really available.
Yes. We run weekly or monthly payroll with variable hours, holiday pay calculated on average earnings, auto-enrolment assessments each pay period and the tronc distribution alongside it.
Fees depend on the number of sites, staff and transaction volume. Weekly reporting and payroll make hospitality packages higher than a simple limited company, and we set out the scope and monthly fee in writing before starting.
The services involved
- Bookkeeping & Cloud AccountingRegular support with records, reconciliation and keeping the books organised.
- Payroll & PensionsPayroll processing and related workplace pension administration.
- VAT ReturnsReview and preparation of VAT returns, based on the agreed service and available records.
- Outsourced Accounting & Finance DepartmentYour whole finance function run from our office: bookkeeping, invoicing, payments, payroll and reporting.
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