Restaurants & Hospitality Accounting

From this perspective, taking into account the industry’s contribution to the UK economy and the great number of people directly and indirectly employed within it, it is unsurprising that the accounting needs of the industry are complex as well. To get an idea, over half of tax revenues collected by the Exchequer in the hospitality industry is estimated to come from VAT sales, with income tax, national insurance contributions, and indirect tax contributions from those directly employed by the industry, excise duty and corporation tax making up most of the remainder.

Accounting for the Hotel and Hospitality Industry

Large, medium, or small businesses operating successfully in the hotel and hospitality businesses sectors do have complex accounting needs, requirements that award-winning accountants DNS is well placed to serve. As experts in tax and tax planning within this industry, of course DNS will implement measures to ensure compliancy while also exploiting all the allowances and reliefs available to ensure growth. However, two critical legislative changes stand to have a huge impact on growth in this sector, for which the expertise of specialist accountants to implement careful planning in, broadly speaking payroll systems, as well as projecting overheads in this respect, is critical. We can also help to Register Tronc Schemes & Tronc Payroll

How are businesses in the hospitality sector to remain compliant and profitable with the introduction of workplace pensions and the change to the national living wage and national minimum wage?

Businesses in the hospitality sector have to meet particular requirements in many different areas besides their accounts: health and safety, fire safety, food hygiene, staffing, and so on. In terms of the sort of business accounting this sector requires, it is part “cash” business, with money changing hands continually. In addition, the businesses in this sector typically run on high overheads (staff, premises, heat, light, perishable and high worth stock, and so on). Thus the accountancy needs for these businesses is complex and demanding, an ever-changing pattern of income and expenditure, very much dependent on global and local events, the weather, and of course a good reputation.

Central to the accounting needs of the hospitality sector are forecasting, improving efficiency, cost-savings, and increasing productivity. An accountant operating in this sector must provide:

• Bookkeeping, accountancy, audit, and tax services: all of which work to sustain business growth while ensuring compliancy;
• Corporate finance: finance for growth, sales, and acquisitions;
• VAT: advice on compliance across the sector, margin scheme for hotels;
• Employment tax/payroll: retaining key staff as well as creating tax-efficient staff remuneration structures. Tronc schemes for tips and gratuities; as well as planning and implementing the new national living wage;
• Business Support: Have you prepared for implementation of the NLW/NMW and Auto-enrolment?

Payroll

From 1 April 2016, the National Living Wage (NLW) introduced new rates for workers aged twenty-five and over. They are entitled to a new minimum pay rate of £7.20 per hour, an increase of 50 pence per hour on the former £6.70.

This represents a rise of up to £900 a year, had you planned for this additional overhead?

DNS will immediately ensure you are correctly implementing the new NLW and NMW, and that staffing overheads are managed efficiently. The government has published a four-step guide for businesses on the living wage website, and for those not affected by the NLW, NMW rates apply for eighteen to twenty year-olds and under-eighteens, as well as apprentices

Are you ready for auto enrolment?

All employers must automatically enrol eligible workers in a work-based pension scheme, that is, anyone over 22, earning more than £9,440. Very soon all small employers with fewer than thirty staff will need to implement and roll out a pension scheme for eligible employees.

Have you started planning for the additional work involved in implementing a work-based pension scheme?

Planning for the introduction and implementation of a work-based pension can take a few months. There is added complexity for the hospitality sector in that it is likely to employ staff on fluctuating wages that rise during seasonal busy times and fall at out-of-season quieter times. In addition, the sector typically employs a high number of seasonal “casual” workers and agency staff on different types of contracts (including zero hour contracts). So what should employers in this sector be doing as a matter of urgency?

Checklist

• To check your staging date go to The Pensions Regulator website
• Start researching pension providers
• Check your systems: can your current systems withstand auto-enrolment or should you look to outsource to a specialist provider? This should be in place up to six months in advance ideally.
• Begin informing eligible staff and notifying them of the auto-enrolment regime.

Visit The Pensions Regulator website, where a handy time planner is available, as well as all the information about auto-enrolment duties for employers.