Specialist Accountants for Retail & Foods

VAT on food is one of the most complex areas of UK tax. Most basic food is zero-rated (0% VAT), but catering, hot takeaway food, confectionery, ice cream, crisps, alcoholic drinks, and soft drinks are standard-rated (20%). Cold takeaway food is generally zero-rated unless it's eaten in your premises. There are borderline cases — for example, a pasty kept warm is standard-rated, but one cooling naturally may be zero-rated. We ensure your business gets this right. Explore VAT services.

Under FRS 102 and FRS 105, stock should be valued at the lower of cost and net realisable value. For retailers, this typically means the purchase price including any delivery costs. You can use FIFO (first-in, first-out) or weighted average cost methods. HMRC does not accept LIFO. Stocktake at year-end is essential — we help estimate closing stock values and ensure correct treatment of obsolete, damaged, or slow-moving inventory. See annual accounts services.

Delivery platform fees are a deductible business expense. However, accounting can be complex because platforms typically deduct their commission before paying you, and settlement statements bundle multiple transactions. We record sales at the gross amount (before commission deductions) and treat platform fees as a separate expense line. This gives you accurate revenue figures and clear cost visibility. Learn about cloud accounting.

Restaurants and cafes can claim: food and drink purchases (cost of sales), staff wages and tronc payments, rent and business rates, utilities (gas/electricity/water), kitchen equipment and utensils, EPOS systems, tableware and linen, cleaning supplies, marketing, delivery platform fees, professional fees, insurance, repairs and maintenance, and capital allowances on larger equipment. We help you maximise claims while ensuring full HMRC compliance. View self assessment services.

Tips distributed through a formal tronc arrangement have specific tax treatment — the tronc master operates PAYE on the distribution, but no employer's NIC applies to tronc payments where the employer isn't involved in allocation decisions. Voluntary service charges added to bills and passed to staff are subject to both PAYE and employer's NIC. Cash tips given directly to staff must be reported by the employee via self assessment. We ensure tip handling is correctly structured and reported. Explore payroll services.

For retail and food businesses, limited company status offers significant advantages: limited liability protection (crucial in high-risk sectors), more tax-efficient profit extraction above £50,000 profits, and a more professional image with suppliers. However, sole trader status is simpler and may suit smaller operations. We analyse your profit levels, growth plans, and risk profile to recommend the right structure. Learn about company formation.