Accountants for UK restaurants, hotels and hospitality businesses
Whether you run one busy restaurant or several sites, the work grows with your turnover. Takings, payroll, tronc and VAT splits all need handling properly, and you need a clear view of where your margin is made.
In short: NDCA is an ACCA-regulated accountancy practice for established UK restaurants, hotels and hospitality groups, from busy independents to multi-site operators. We handle daily takings and EPOS reconciliation, VAT, payroll including tips and your year-end accounts. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
We work with established independent restaurants, hotels and bars, as well as restaurant groups and contract caterers, mainly in Xero. Bookkeeping, VAT, payroll, tronc and year-end are all managed every month, not panicked after a deadline.
What NDCA clients say
Verified Google reviews from NDCA clients.
In short: NDCA is an ACCA-regulated accountancy practice for established UK restaurants, hotels and hospitality groups, from busy independents to multi-site operators. We handle daily takings and EPOS reconciliation, VAT, payroll including tips and your year-end accounts. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
We work with established independent restaurants, hotels and bars, as well as restaurant groups and contract caterers, mainly in Xero. Bookkeeping, VAT, payroll, tronc and year-end are all managed every month, not panicked after a deadline.
What is on this page?
- The Tipping Act and tronc, what changed in October 2024
- The VAT splits that catch hospitality owners out
- Daily takings reconciliation
- The tax issues hospitality owners ask us about most
- What can a hospitality business claim as an allowable expense?
- How NDCA works
- Who we work with
- The software we use: EPOS, Xero and Apron
- Switching from another accountant
- Accountant for hospitality businesses UK: FAQs
Send us your numbers and we will talk you through what a fixed monthly service would look like for your business.
The Tipping Act and tronc, what changed in October 2024
The biggest change to hospitality payroll in years. The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024. The headline rules:
Since October 2024, 100% of qualifying tips, gratuities and service charges must be passed to workers, with only tax and NI deductions allowed: no deducting processing fees, software costs or tronc admin and no smoothing tips across the year. Tips must be distributed by the end of the following month, allocated fairly and transparently, backed by a written tipping policy and recorded for three years. Workers can challenge unfair allocation at an employment tribunal. The rule applies to agency workers too. An independent tronc arrangement is automatically treated as fair, provided the operator is genuinely independent, as set out in the government’s statutory code of practice on tips.
The VAT splits that catch hospitality owners out
VAT in hospitality is not one rate. Different parts of the same menu, sold in different ways, attract different rates. Getting this wrong is the single biggest VAT risk in the sector. The rules:
Eat-in food and drink: 20% VAT, no exceptions
If a customer eats or drinks anything on your premises (or at outdoor tables, designated seating or a shared seating area you provide), the supply is catering, taxed at 20% regardless of what the item is. Cold sandwich eaten at a cafe table: 20%. Bottle of water consumed in the seating area: 20%. Even a piece of fruit, normally zero-rated in a supermarket, becomes 20% when eaten in.
Hot takeaway food: usually 20% VAT
Food is “hot” for VAT purposes if it meets any of HMRC’s five tests: heated so it can be eaten hot, heated to order, kept hot after cooking (in a hot cabinet or heated unit), supplied in heat-retaining packaging or advertised or marketed as hot. Hot coffee, hot sandwiches, fish and chips, kebabs, pizzas: all 20%. The exception: food only hot because it has just been baked (a fresh loaf of bread, a baguette) and is not marketed as hot for immediate consumption, usually zero-rated.
Cold takeaway food: usually 0% VAT, but with exceptions
Most cold takeaway food is zero-rated. The exceptions are “excepted items” listed in VAT Notice 701/14, including confectionery, sweetened baked goods (chocolate-covered pastries, iced doughnuts), crisps, salted nuts, ice cream and a long list of speciality items. A plain cold sandwich for takeaway is zero. A chocolate-covered croissant is 20%.
Alcoholic drinks: always 20%, eat-in or takeaway
There are no zero-rate exceptions for alcoholic drinks. Beer, wine, spirits and alcoholic mixers are all 20%, wherever they are consumed. Food that contains alcohol, such as a rum baba or a sherry trifle, follows the normal food rules instead.
Hotel accommodation: 20%
Sleeping accommodation in a hotel, guesthouse or B&B is standard-rated. A temporary reduced rate applied during COVID: 5% from 15 July 2020 to 30 September 2021, then 12.5% until 31 March 2022. The standard 20% rate has applied since 1 April 2022.
For many hospitality businesses, VAT is one of the largest tax bills they pay. EPOS systems set up correctly to split each transaction line at the right rate, and a clean monthly reconciliation back to the bank, are where the margin gets protected.
Daily takings reconciliation
A single day in a busy restaurant might include cash sales, card payments through one or two terminals, contactless tips into a separate pot, third-party delivery payouts from Deliveroo, Uber Eats and Just Eat (often a week or two in arrears, net of commission), gift voucher redemptions and till variances. Reconciling that lot every day, against the bank, against the EPOS, against the delivery platform statements, is what keeps the books accurate.
We use Xero with structured daily journals to pull each takings line into the right place: gross sales, output VAT, card and platform fees, delivery commissions, tips. The bank reconciles cleanly. The VAT return is built on accurate numbers. The management accounts show actual margins, not estimated ones.
The tax issues hospitality owners ask us about most
Food cost, drink cost and labour cost as a percentage of sales are the numbers that matter most in hospitality. We report them each period and track them against the targets you set for your menu and your site, not a generic small-business template.
Hospitality businesses appear regularly on the list of employers named for underpaying the National Minimum Wage, which the Department for Business and Trade publishes. Current National Minimum Wage rates and age bands change every April, so getting payroll calculations and unpaid breaks right is a compliance issue, not a nice-to-have. We run your payroll to get it right.
A new kitchen or bar fit-out splits between structural work (written off over time) and qualifying plant and machinery (full expensing or Annual Investment Allowance, up to £1,000,000 a year), and we split the invoices correctly to maximise the upfront relief.
Wet stock, dry stock and food all need counting and valuing at year-end, at the lower of cost or net realisable value, reconciled against EPOS.
Sole traders above £50,000 in trading income moved onto Making Tax Digital for Income Tax from April 2026, with the threshold falling to £30,000 from April 2027 and £20,000 from April 2028. We get clients ready ahead of their date, not just aware of it.
None of this is useful if you only see it once a year. A quiet January, a VAT quarter landing next to a supplier price rise or a site that looks busy but is not actually profitable are the kind of things a monthly service should flag while there is still time to act, not something you find out about at year end. We build management accounts around those figures, so you can see margin by site, by day part or by menu category and a cash flow forecast that follows hospitality’s own rhythm rather than a calendar month: quarterly VAT, a monthly tronc distribution deadline and takings that never arrive on a neat schedule.
What can a hospitality business claim as an allowable expense?
The obvious ones (food and drink purchases, rent, utilities, insurance) you already claim. The ones we see missed most often:
Kitchen and front of house:
- Packaging and takeaway consumables (boxes, cups, straws, napkins)
- Cleaning chemicals and PPE for kitchen and front of house
- The plant and machinery element of equipment purchases (fridges, ovens, POS systems) under the £1,000,000 Annual Investment Allowance
Staff:
- Branded uniforms
- DBS checks and food hygiene training
Licensing and compliance:
- Premises and alcohol licences
- PRS/PPL music licensing
- Grease trap servicing
Not allowable: customer entertaining, the personal-use portion of any expense and ordinary clothing even if worn for work.
How NDCA works
What you can expect:
Fixed monthly fee
You pay one price every month for everything we agreed at the start: bookkeeping, daily takings reconciliation, VAT, payroll, tronc, year-end, tax. No clock-watching, no surprise invoices when a busy quarter pushes up volumes.
Direct answers from your accountant
You get a named accountant who understands the rhythm of a hospitality business, and normally answers the same day, which matters when a payroll question lands on a Friday afternoon and the team gets paid Tuesday. Working with us monthly rather than once a year means you find out what the numbers mean in time to do something about them.
Built around how hospitality actually runs
Hospitality does not run on calendar months. Cash arrives daily. Delivery platforms pay weekly. VAT is quarterly. Tips have a statutory monthly distribution deadline. Staff turnover is constant. We build the workflow around those cycles, not around a generic accountancy schedule.
Who we work with
We work with established hospitality businesses, from busy independent restaurants with a strong turnover to multi-site groups juggling different EPOS systems across locations. Independent restaurants, hotels, bars, restaurant groups and contract caterers come to us for the same reason: the accounting needs to keep pace with a trade that runs nights, weekends and bank holidays. We are the right fit for owners who are growing turnover or opening their next site and who want payroll, VAT and management accounts handled by one named accountant rather than passed between departments.
The software we use: EPOS, Xero and Apron
We run your bookkeeping in Xero, and for hospitality that is a deliberate choice. Bank feeds match against your EPOS takings within a day, VAT can be split and reported per line rather than as one blended rate, and if you run more than one site, each one reconciles into a single set of management accounts rather than a spreadsheet stitched together at month end.
EPOS systems (Square, Toast, Lightspeed, Zettle, SumUp) feed daily takings straight into Xero through structured journals: gross sales, VAT split by rate, fees and refunds all coded correctly. Delivery platform payouts (Deliveroo, Uber Eats, Just Eat) reconcile against the published statements, and live bank feeds match against takings within 24 hours. If you are not yet on Xero, we migrate you across as part of onboarding.
For paperwork, forward an invoice to your dedicated Apron email address or snap a photo of a receipt and the supplier, date, amount, VAT and line items are pulled out and pushed into Xero, coded to food cost, beverage cost, utilities or whatever line it belongs on.
VAT splits, tronc and daily takings getting complicated?
Hospitality VAT is its own world. Tronc needs running properly since October 2024. Daily takings need reconciling against the bank. Send us your situation. We will give you a fixed monthly quote at the end of your free consultation call.
Reviews
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What NDCA clients say
We work with businesses across the UK and beyond, delivering results that speak for themselves. Browse our reviews to see the impact we have made, and if you have worked with us, we would love for you to leave a review on Google
Switching from another accountant
If you already have an accountant and the bookkeeping cannot keep up with daily takings, the tronc is not being run correctly or the VAT splits are guesswork, switching is simpler than people think. We send your current accountant a professional clearance letter, collect your records and pick up where they left off. How long it takes depends mainly on how quickly your previous accountant sends the records across, and we keep you updated throughout.
You do not need to wait for year-end. You do not need an awkward phone call. We handle it.
Accountant for hospitality businesses UK: FAQs
Once your taxable turnover exceeds £90,000 in any rolling 12-month period, yes. For most restaurants and cafés serving food and drink for eat-in consumption, almost all sales are standard-rated at 20%, which puts even small operators near the threshold quickly. We monitor turnover monthly and register at the right time.
Eat-in: 20%, with no exceptions. Hot takeaway: 20% in most cases (with the five-test rule). Cold takeaway: usually 0%, except for "excepted items" like confectionery, sweetened baked goods, crisps and ice cream. Alcoholic drinks: 20% in every scenario. We set up your EPOS to apply the right rate to each item.
All qualifying tips and service charges must reach your staff in full, minus only tax and NI, under a written policy with records kept. We set up the process with you, including a tronc where it suits.
A tronc is a system for pooling and distributing tips, gratuities and service charges among staff. A tronc is operated by a "troncmaster" who can be an employee, an external accountant or an independent operator. When the tronc is genuinely independent of the employer, tronc payments do not attract employer or employee National Insurance Contributions, which is the main tax-efficiency reason for setting one up.
The NMW (and National Living Wage for those 21 and over) is the legal minimum hourly pay rate. Hospitality is the most NMW-exposed industry in the UK. Common compliance failures include uniform deductions taking pay below the minimum, unpaid time spent setting up or cashing up and incorrect tip handling. We audit the payroll for NMW compliance every period.
Partly. Fixed items such as walls and plumbing are written off slowly, while equipment like fridges, ovens and EPOS systems can usually be claimed straight away. We split the invoices so you get the most relief up front.
Hospitality income is rarely level across the year: a summer beer garden, a Christmas party season or a coastal high season can carry months of thinner trade. We build a rolling cash-flow forecast from your actual takings pattern, not a generic template, so you can see a quiet month coming and plan around it rather than react to it, timing VAT and PAYE payments, stock buying and seasonal staffing around when the cash is actually there.
We work with whatever till system you already use. Square, SumUp, Lightspeed, Toast and others all export daily Z-reports or integrate directly and we reconcile those against your bank takings and card settlements each month so sales, tips and refunds are coded correctly rather than dumped into the accounts as one lump sum.
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Ready to hand over the daily reconciliations?
Most hospitality clients hand us the EPOS reports, the delivery platform statements and the supplier invoices once a week and we handle VAT and year-end from there. Send us a few details. We will take it from there.
