Hospitality VAT Returns and Registration

Written and reviewed by the Hospitality Accountants editorial team. Last reviewed 27 July 2026.

This is the VAT engagement for hospitality businesses. We register you when you need it, prepare and file the quarterly return, work out whether the Flat Rate Scheme helps or hurts you, and keep you compliant with Making Tax Digital. VAT is where a food business most often overpays or slips into error, so it is worth doing precisely.

This page is the doing. The line-by-line rules on hot food, cold food and eat-in sit in our guide on VAT for restaurants and takeaways. Handing us the actual returns, quarter after quarter, is the service here.

What the VAT Engagement Covers

We watch your rolling turnover and register you for VAT once you cross the 90,000 pound threshold on a rolling 12-month basis, which has applied since 1 April 2024. We then prepare and file every quarterly return, reconciled to your till and bank records rather than to a rounded estimate.

We also manage deregistration where it fits, since you can leave the scheme once turnover falls below £88,000. Registration is not a one-way door, and for a seasonal or shrinking business the timing of coming out matters as much as going in.

Where the Flat Rate Question Gets Awkward

The Flat Rate Scheme lets you pay a fixed percentage of gross takings instead of tracking input VAT, and the rate depends on your trade: catering including restaurants and takeaways is 12.5%, pubs are 6.5%, and hotel or accommodation is 10.5%, all applying since 1 April 2022. Whether it saves you money turns on how much VAT you would otherwise reclaim on stock, rent and refits.

That is the trap. A business planning a fit out or paying VAT on rent often reclaims more on the standard method than the flat rate saves, so the scheme that looks simpler can cost you real money. We run the comparison on your actual numbers before you choose, and we revisit it when your circumstances change.

How We Run VAT and Keep You MTD Compliant

Making Tax Digital for VAT already applies to VAT-registered businesses, so your records have to be kept digitally and your returns filed through compatible software with a clear digital link from the till to the return. We put that pipeline in place so there is no manual re-keying and no broken link for HMRC to query.

Each quarter we reconcile, prepare and file, and tell you what to pay and when. If you also want Making Tax Digital for Income Tax handled as it phases in, our guide to Making Tax Digital for hospitality sets out the timetable we work to.

What the VAT Service Costs

You pay a fixed fee agreed before we start, based on your turnover and how many returns you file a year. There is no per-return surcharge and no extra bill for the flat rate review.

We do not cold-call and we are not a directory. The practice is Tidy Money Ltd, run by Preetesh Parmar FCCA and regulated by the ACCA.

Common questions

When do I actually have to register for VAT?

You must register once your taxable turnover passes £90,000 measured over any rolling 12-month period, a threshold that has applied since 1 April 2024. It is not a calendar-year test, so a strong run of months can tip you over without a full year having passed. We monitor your rolling figure so registration happens on time rather than late with a penalty. If turnover later drops below £88,000, we can look at deregistering you.

Is the Flat Rate Scheme worth it for a restaurant?

It depends entirely on how much VAT you would otherwise reclaim. Catering including restaurants and takeaways sits at a flat rate of 12.5% of gross takings, pubs at 6.5% and accommodation at 10.5%. If you pay VAT on rent or you are planning a fit out with large reclaimable input VAT, the standard method often beats the flat rate. We compare both on your real numbers rather than assuming the simpler option is cheaper.

What does Making Tax Digital mean for my VAT?

It means your VAT records must be kept digitally and your returns filed through compatible software, with an unbroken digital link from your till to the return. This already applies to VAT-registered businesses, so there is no opt-out while you are registered. We set the software and the digital links up so nothing is re-keyed by hand, which is where errors and HMRC queries usually start. You approve each return before we file it.

Tell Us About Your Venue and We Will Quote

Tell us what you run, how many sites, and what is outstanding: a VAT return, the payroll, a tronc scheme, or a year end. We come back with a fixed fee for the work and the date it has to be done by. If you are a new venue and only need the books set up, we will say so rather than sell you a full package.

Get a fixed quote