Accountant for Restaurants, Pubs and Hospitality Businesses in the UK
Hospitality is one of the few sectors where an accountant can genuinely change what happens in the business, not just report on it after the fact: cash and card revenue moves through a till every night, tips carry their own tax rules, VAT depends on whether food is eaten in or carried out, and margins are won or lost in stock control long before anything reaches the profit and loss account.
Why restaurants and pubs need a different kind of accountant
Most small business accounting is built around a handful of invoices a month. Hospitality is the opposite: hundreds of small transactions a day, split across cash, card and delivery platforms, each with its own settlement timing and fees. An accountant used to a services business will bolt this onto a standard bookkeeping process and miss where the real numbers are hiding.
The EPOS system, not the bank statement, is the primary source of truth in a restaurant or pub. A good accountant reconciles the daily or weekly till reads against bank deposits and card settlement as a matter of routine, not as an afterthought at year end. That habit is what catches till shortages, comped meals that were never authorised, or a delivery platform paying out less than it should, while there is still time to do something about it.
VAT on food and drink: eat-in, takeaway, hot and cold
Food VAT in the UK depends on how and where it is sold, not just what it is. Food eaten on the premises is standard-rated regardless of temperature. Cold food taken away is generally zero-rated, while hot food taken away is standard-rated. A restaurant that also runs a takeaway counter, or a pub doing both bar meals and a deli case, needs its EPOS categories built to split this automatically at the point of sale, because correcting it after the fact means going back through months of transactions.
Alcohol is always standard-rated, and function or events income often needs its own VAT coding again. None of this is complicated in principle, but it is easy to get wrong at volume, and HMRC has heard every version of an honest mistake before. An accountant who has actually configured VAT codes on a hospitality EPOS system, rather than just filing the return each quarter, is the one who catches a misconfiguration before an inspection does.
Tips, tronc and payroll
The Employment (Allocation of Tips) Act 2023 (legislation.gov.uk/ukpga/2023/13) came into force on 1 October 2024. It requires employers who deal with tips, gratuities and service charges regularly to pass them on to workers in full, allocate them fairly, keep a written tipping policy, and keep records of how tips were distributed. Workers can bring an employment tribunal claim if this is not followed, and a tribunal can award compensation of up to 5,000 pounds per worker.
A properly constituted tronc, run by an independent troncmaster who genuinely controls how tips are allocated, still carries the tax benefit it always has: employer National Insurance is not due on tips distributed through it, though income tax is still collected through PAYE. If the employer has any real say in who gets what, HMRC can treat the arrangement as employer-controlled and the National Insurance exemption is lost. On top of that, hospitality payroll usually means high staff turnover and casual or zero-hours contracts, which is its own ongoing administrative load.
Margins, stock and reporting across multiple sites
Gross margin in hospitality is usually tracked separately for food and drink, because the two behave very differently: drink margins are typically higher and more stable, food margins move with ingredient costs, portion sizes and wastage. An accountant who ties actual stock takes back to the cost of sales line, rather than just posting supplier invoices, is the one who tells you when a menu item has quietly stopped making money.
Groups running more than one site need consolidated management accounts that let you compare venues against each other, not just a combined total. A holding company structure can also separate the trading risk of each site and simplify how profits move between them, but it is only worth setting up once there is a real second site to justify it, not before.
Frequently asked questions
Do restaurants and pubs actually need a specialist hospitality accountant, or will a general accountant do?
A general accountant can file accurate accounts and VAT returns. The difference with a specialist is that they already know where hospitality businesses tend to lose money: unreconciled EPOS data, mis-coded food VAT, tronc arrangements that do not actually qualify for the National Insurance exemption, and stock that is never checked against the cost of sales line. That is the value, not the compliance filing itself.
How does the tips and tronc law affect my payroll?
The Employment (Allocation of Tips) Act 2023, in force since 1 October 2024, requires you to pass on tips in full, allocate them fairly, keep a written policy, and keep records staff can ask to see. Running tips through a properly independent tronc still saves employer National Insurance, but only if the troncmaster genuinely controls the allocation without your input. If you influence who gets what, HMRC can treat the tips as employer-allocated and the National Insurance exemption is lost.
Is VAT really different for takeaway food compared to eating in?
Yes. Anything eaten on your premises is standard-rated no matter what it is or how hot it is served. For food taken away, cold items are generally zero-rated and hot items are standard-rated. If you run both a dining area and a takeaway counter, your till system needs to apply the right VAT code automatically at the point of sale, because sorting it out retrospectively across months of transactions is a much bigger job.