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Restaurants & Hospitality Accountants

Comprehensive accounting for restaurants, cafes, hotels, and hospitality businesses with tips accounting, license compliance, and food cost analysis.

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Written by Asrah Abbas, ACA / ACCA — Principal at Westfin Accountants Ltd
Chartered accountant with 12+ years of UK practice experience. Member of the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA).
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In plain English

Restaurant accounting is high-volume, low-margin, and heavily regulated: tronc schemes for tips, alcohol licensing, food waste, and the Allocation of Tips Act 2023 (live since 1 October 2024). Westfin handles weekly payroll for variable rota staff, tronc administration, and food cost % reporting.

Sector-specific tax matters

The reliefs, schemes and risks that consistently apply in this sector — with HMRC source links so you can verify everything we say.

Tronc & the Tips Act 2023

Employer-controlled gratuities must be passed in full to workers since 1 Oct 2024. Tronc schemes avoid employer NI on tips — but require a tronc master and written policy.

Reference (gov.uk)
VAT — eat-in vs takeaway

Hot takeaway food = standard 20% VAT; cold takeaway = zero-rated; eat-in = always standard rate. Mixed-rate till categories matter.

Reference (gov.uk)
National Minimum Wage compliance

NLW (21+): £12.21/hr from April 2025. HMRC name-and-shame for non-compliance, with penalties up to 200% of underpayment.

Reference (gov.uk)

Common Restaurants & Hospitality Accounting Challenges

Cash and card tips accounting

Food and beverage cost control

Alcohol licensing compliance

High staff turnover and payroll

VAT on food vs drinks

Seasonal revenue variations

Our Restaurants & Hospitality Solutions

Integrated EPOS and accounting

Automated tips distribution

Cost of goods sold tracking

Recipe costing and margin analysis

VAT optimization for mixed supplies

Labor cost percentage monitoring

Specialized Services for Restaurants & Hospitality

EPOS integration (Square, Toast, Lightspeed)

Tips and gratuities accounting

Food cost analysis and GP reporting

Alcohol license compliance

Staff payroll including tronc schemes

VAT mixed supply calculations

Restaurants & Hospitality FAQs

How do you handle tips and gratuities?

We set up tronc schemes for tax-efficient tip distribution, ensuring compliance with HMRC rules. Service charges are tracked separately and distributed according to your policy.

What is VAT treatment for hot food vs cold food?

Hot takeaway food is standard-rated (20% VAT) while most cold food is zero-rated. We implement systems to correctly categorize sales, avoiding VAT errors and penalties.

Can you help with food cost control?

Yes, we provide GP analysis, recipe costing, and waste tracking. We identify high-cost items and recommend menu engineering to improve profitability.

Ready to Get Started?

Speak to our Restaurants & Hospitality accounting specialists today