Bookkeeping for Pubs: Every detail you need to Know

The appropriate business system is the first thing which every business owner wants to have in their business for getting the best information out of it. An experienced bookkeeper is the one with whom by getting in touch with you will gain some valuable insight of maintaining an accurate business system.

It is the duty of an experienced bookkeeper to give you the best possible advice on your accounting systems. You may be looking to outsource some bookkeeping functions and for that you need to have an experienced and affordable accountant who can do so for you.

As a business owner you need to strike a balance between what you can possibly expect to do such as banking, petty cash, tills etc. and what is required to be taken care of by experts such as tax, VAT, payroll etc. By doing so, it will permit you to spend sufficient time to run and promote your pub.

Pubs, no matter whether they are free houses or tenancies are, in a way, just like any other business have to maintain accurate records of their income and expenditure, assets and liabilities, receipts and payments.

If you’re a sole trader, you’ll need to maintain self-employment records for five years. If your pub business is in the form of a partnership or a limited company you need to maintain records for six years; after the latest date your tax return falls due.

Maintaining business records is not only about keeping the HMRC happy, up to date but to keep good record-maintenance system which will assist you in:

  • Keeping track of your income and expenses and thus profitability
  • Assess quickly what you are owed by others and how much you owe them
  • Save accountancy costs and time
  • ask for a credit or bank loan if you need to
  • obtain the correct amount of benefits or credits
  • Pay the accurate tax amount
  • Avoid paying any extra tax or penalties

Records you are required to maintain

The records you maintain will be based on the nature of your business and the different taxes paid by you such as income/corporation tax, collecting Machine Game Duty/PAYE or charge VAT. You can either keep them on paper, digitally or as part of a software program like book-keeping software.

Always remember, HMRC can charge you a penalty if your records aren’t complete, accurate and readable. The HMRC website also gives such guidance. 

Sole traders and Partnerships

You must maintain financial records such as evidence of any tax paid, accounts and records pertaining to your income and expenses if you’re a self-employed. You’ll require these to complete your several tax returns or answer any questions from HMRC about the returns you complete and submit to HMRC.

You are also required to keep your business records different from your personal records and maintain a business bank account for your business.

The basic records of your business must include:

  • A record of all sales and takings
  • A record of all purchases and expenses

A profit and loss account is created from the information obtained from these basic business records which discloses all income you have obtained, less any expenses you have paid to disclose what profit or loss you have made.

Since all pub businesses are separate there are various types of detailed records you may also need to maintain, some examples are:

  • Cash Book and Petty Cash Book(pubs handle a lot more cash as compared to some other types of business)
  • Wages records
  • Sales and Purchase ledgers(where you record your takings and all the things you purchase for your pub that isn’t covered by petty cash)
  • Invoices and receipts issued and received (till rolls and bills to customers for private parties in function room and payments taken.
  • Stock records(stock take reports, waste and ullage books, order books.
  • Cheque books, Bank statements, paying in books.

Allowable Expenses

Both Individuals and companies are permitted by tax laws for claiming “allowable expenses” with in respect of their business and personal affairs. Some examples are:

  • Direct Costs(including wages): purchases and goods for resale (foods and drinks etc) and wages & salaries.
  • Premises Costs: office equipment, fixtures & fittings, insurances, repairs, rent, rates, utilities, maintenance and renewals.
  • Motor Expenses: road tax, insurance, fuel, break-down, servicing, tyres, parking, car& van hire or purchase of new motor vehicles, cover, spares, repairs. As vehicles are used for both business and personal travel purposes, it is essential to maintain detailed records of both personal and business mileage for every accounting period so that motor expenses can be claimed for only business use.
  • Top Tip: A single travel expense pubs often have to be claimed for, late night taxis for staff, so in order to have an account with a local firm is the better way for keeping track of payments and expenses.
  • Printing & Stationary : business cards, letterheads, writing paper, pens, pencils, photocopying and printing, general stationery, menus, posters and banners, office equipment(e.g desk, chair, answer phone, computer etc.).
  • Administration: telephone systems and mobile phone calls, postage bank fees, finance charges, hire purchase & bank loan repayments, Self-Employed National Insurance, internet and website costs, advertising, marketing, professional and legal charges(accountant, solicitor, surveyor, stocktaker) professional subscriptions(membership of trade association such as British Institute of Innkeeping),

The above list is by no means comprehensive as the accurate nature of your pub business will decide the type of expenses and records etc. you record and claim. It is the duty of your accountant for guiding you on the same.

Limited Companies

At Companies House, if your company is registered with, you need to maintain and retain specific accounting records which shows the transactions and the financial position of your company. You still have to do this even if your company is not trading currently or no longer trading.

These records include:

  • A record of your company’s assets
  • A record of your company’s liabilities
  • Particulars of any stock on hand at the end of your financial year.
  • A record of your company’s income and expenditure

The business records kept by your Company for Corporation Tax purposes must:

  • be up to date and complete
  • permit you to file an authentic Company Tax Return
  • permit you to work out accurately the amount of Corporation Tax you owe to HMRC or can be reclaimed from HMRC.
  • be easily reachable if HMRC asks to assess them during an enquiry into your Corporation Tax affairs.

An example of the business records that you may consider it useful to maintain includes the following:

  • A cash book and any other account books you maintain
  • Bank statements and paying in slips
  • Invoices and any maintenance of daily takings records such as till rolls
  • Purchases and sales books or ledgers
  • A petty cash book
  • Delivery notes and order records
  • A petty cash book
  • Other important business correspondence

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