The work of a restaurant accountant is mostly weekly and monthly rather than annual. For a restaurant, café or takeaway it covers:

• VAT returns that split hot, cold, eat-in and takeaway sales correctly, filed under Making Tax Digital
• Payroll for shift staff, including the National Living Wage, holiday pay and tips
• Gross profit and staff cost as a percentage of sales, week by week
• Deliveroo, Uber Eats and Just Eat payouts reconciled to the sales they came from
• Year-end accounts and the corporation tax or self-assessment return

• VAT returns and registration
• Payroll services

If you run a café or coffee shop, you need an accountant who understands that your sales are small, frequent and split across several VAT outcomes in the same queue. We act for cafés across North London — along Green Lanes in Harringay and Palmers Green, and closer to our office in Finchley N3 — and the work comes down to a handful of things done properly every week.

Hot drinks, pastries and the eat-in question

Hot drinks are standard-rated. A cold sandwich or a pastry to take away is usually zero-rated; the same item eaten at one of your tables is standard-rated, and so is anything sold hot. Once your taxable turnover passes the £90,000 registration threshold, every sale has to land under the right rate. The practical answer is a till with separate eat-in and takeaway keys that staff actually use, and a monthly check that the split in your VAT return matches the till reports.

Cash takings and till records

Card payments have reduced the cash in most cafés but not removed it. Keep the daily Z-reading, bank cash takings in full rather than paying suppliers or casual wages straight out of the till, and note any cash that is spent before it reaches the bank. When the till, the bank and the purchase invoices agree, the bookkeeping takes a fraction of the time and any question from HMRC has a straightforward answer.

Tips, tronc and PAYE

Tips paid by card must reach your staff in full. Shared out through your own payroll, they carry PAYE and National Insurance. Allocated by a genuinely independent troncmaster, they still go through PAYE for income tax but can be free of National Insurance. Cash in a jar that staff divide among themselves is theirs to declare. Whichever applies, you need a written tipping policy that staff can see.

Payroll and pensions for part-time staff

Café rotas change weekly and many staff work part-time. Each payday needs a Full Payment Submission on or before the date you pay, holiday pay has to be worked out for irregular hours, and every worker has to be assessed for auto-enrolment each pay period — part-time staff can become eligible as their hours rise. If you employ people other than yourself, the Employment Allowance of up to £10,500 comes off the employer National Insurance bill, which runs at 15% above £5,000 of each employee’s annual earnings.

Business rates and fixed costs

Rent, business rates, energy and card-machine fees arrive whether or not the weather brings people in. Check that your rates bill describes the premises correctly and whether any relief applies, and budget for fixed costs monthly so a quiet fortnight does not turn into a cash problem.

A takeaway has fewer VAT categories than a café, but most of what it sells is hot, so most of it is standard-rated once you are registered. The exceptions — a cold sandwich, wrap or salad sold to take away — are zero-rated and worth coding correctly, because across a large volume of orders the difference is real money.

Many takeaways are run by sole traders, and that brings a new obligation. From 6 April 2026, if your qualifying income — turnover, not profit — is over £50,000, Making Tax Digital for Income Tax applies: digital records and quarterly updates to HMRC, with the threshold falling to £30,000 from April 2027. A busy takeaway is almost certainly in scope. We set up the software, keep the records and send the updates, so the change is administration you do not have to think about.

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Cold takeaway food is generally zero-rated. Hot takeaway food is standard-rated. Anything eaten on the premises is standard-rated whatever its temperature. A cold sandwich to take away and the same sandwich toasted are different VAT outcomes, and a business selling both needs a till that records the distinction — because HMRC will ask how the split was arrived at.

We make sure the point-of-sale setup produces a defensible split, and we look at whether a retail scheme would reduce the work without costing you money.

Employers must pass on tips to staff in full and cannot make deductions from them. How a tip is distributed determines the National Insurance position: amounts paid out through a properly independent tronc arrangement can avoid NIC, while tips run through the business payroll generally cannot. The arrangement has to be genuine — an employer who controls the allocation is not running a tronc, whatever it is called.

Hospitality is one of the sectors HMRC treats as higher risk, and its enquiries typically start with whether recorded takings are credible against purchases, staffing and opening hours. The protection is ordinary and unglamorous: till readings kept, banking that matches, supplier invoices filed, and a gross margin that holds steady. We put that record together as we go, so an enquiry is a matter of handing over what already exists.

Fitting out a restaurant is usually the largest single spend a new operator makes, and how it is treated decides the tax bill for years.

Kitchen equipment, refrigeration, furniture and most loose fittings qualify for capital allowances, and the annual investment allowance means the whole cost can often be relieved in the year it is spent. Parts of the building itself do not — the structure, and general decorative work, sit outside. Integral features such as heating, air conditioning, and electrical and water systems have their own slower rate.

The difference between full relief now and relief spread over decades is decided by how the builder's invoice is broken down. Ask for it itemised while the work is happening, because reconstructing it from a single figure afterwards is guesswork that HMRC has no reason to accept.

Food eaten by staff and food thrown away both leave the same hole in the stock figures, and neither is a sale — but they are treated differently and both attract attention when the gross margin does not look right for the trade.

Free or subsidised meals provided to staff on the premises are generally not a taxable benefit where they are available to all employees on the same terms. Wastage is an ordinary cost of the trade. What causes trouble is neither being recorded, so the only visible explanation for the gap is unrecorded sales.

A wastage sheet and a note of staff meals take a minute a day and answer the question before it is asked.

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For most restaurants and takeaways, delivery apps are now a large share of turnover and the single most common source of error in the accounts. The problem is not the platform — it is that the money arriving in the bank bears almost no relation to what was sold.

Record the sale, not the payout

The platform collects the full amount from the customer, deducts its commission, and pays you the remainder days later, often batched. If you record the payout as your sale, you have understated turnover by the commission and recorded no cost for it. Your gross margin then looks wrong, your VAT is wrong, and — the part that matters most — you may believe you are below the registration threshold when you are not.

The commission has its own VAT

Commission charged by the platform is a supply to you, and where it carries VAT that VAT is generally recoverable if you are registered. Netting the whole thing off means the input tax is never claimed. Over a year on a busy site that is a meaningful sum simply left behind.

HMRC can see the platform figures

Digital platforms report seller information, so the sales made through them are visible independently of what you declare. A cash business with a strong app presence is therefore in a different position from one a decade ago: the app half of the turnover is externally verifiable, and any mismatch is the obvious place to start an enquiry. The practical consequence is that the platform records have to be reconciled properly rather than approximated.

And check whether the delivery is profitable at all

Commission on delivery orders is substantial, and food costed for a dine-in margin can lose money once it is paid. Plenty of kitchens are busier and no better off. It is worth costing a few of your most-ordered dishes at the delivery price after commission before concluding that more orders is the same thing as more profit.

The services we provide for restaurants, cafés and takeaways include year-end accounts and corporation tax and business start-up. Each has its own page with what is included and how we work.