Accountants for Caterers and Street Food

Accounts, VAT and payroll for event caterers and street food operators.

Catering and street food businesses operate differently from fixed-site restaurants: income arrives event by event, staffing is seasonal, equipment travels with the unit, and every supply you make is a standard-rated catering service regardless of what food you serve. Mobile unit capital allowances, pitch and market fees, cash basis versus accruals and the employment status of casual event staff are the questions that come up every year. An accountant who treats a caterer like a retailer will get the VAT wrong from the first return.

What makes caterers and street food accounting different.

Catering is always standard-rated at 20%

Every supply made by a caterer is a catering supply and is standard-rated at 20% regardless of the food involved. This is a material distinction from retail cold food, which is generally zero-rated. A caterer who treats certain food lines as zero-rated because those products would be zero-rated in a shop is misapplying the VAT rules. Recharged staffing, hire equipment and transport that form part of the catering service are part of the same standard-rated supply. See gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091.

Event and job costing for margin control

A caterer's profitability is measured event by event. Per-event margin depends on ingredient cost, staffing hours billed, equipment hire, travel and pitch or venue fees. Deposits must be accounted for when received for VAT purposes. A caterer relying on year-end accounts rather than per-event job costing cannot identify which bookings are profitable or where waste and over-staffing are eroding margin. Event-margin benchmarks are illustrative guidance only, not authoritative figures.

Mobile units, vans and equipment: capital allowances

Kitchen trailers, food trucks, portable equipment and refrigeration units are qualifying plant and machinery. The Annual Investment Allowance covers up to £1,000,000 of qualifying spend per year. From April 2026, the main-pool Writing Down Allowance is 14% under Finance Act 2026 s.28, and a 40% First Year Allowance is available for qualifying main-pool additions under FA 2026 s.29. The correct sequencing is AIA first, then FYA on any remaining qualifying main-pool spend, then WDA on the pool balance. Whether a specific vehicle is classified as a van (qualifying for full capital allowances) or a car (restricted treatment) requires a write-time check against HMRC vehicle guidance.

Seasonal staff and employment status

Many caterers engage casual chefs, waiters and bar staff for individual events, often treating them as self-employed. HMRC's employment status tests focus on control, the right of substitution and mutuality of obligation. Casual and seasonal workers engaged regularly, told how and when to work, and unable to freely substitute someone else are likely to be employees for PAYE and National Insurance purposes regardless of how they are contracted. Misclassification creates backdated PAYE, employer National Insurance at 15% and potential penalties.

How we help caterers and street food.

Annual accounts with per-event costing

We prepare year-end accounts structured around event income and the costs that flow from each booking: ingredients, casual staff, hire and travel. Corporation Tax is calculated and filed on time. For sole-trader caterers above £50,000 income, we set up Making Tax Digital for Income Tax from 6 April 2026. We also advise on the cash basis versus accruals choice: cash basis is the default for unincorporated businesses from April 2024, but caterers carrying significant stock and equipment may benefit from electing accruals for more accurate period-end profit reporting.

VAT returns on catering contracts

We prepare quarterly VAT returns applying the correct 20% standard rate to all catering supplies, handle VAT on deposits (due at the point of receipt), advise on the VAT treatment of recharged staffing and equipment hire, and review whether the Flat Rate Scheme catering sector rate of 12.5% is appropriate. Where pitch, market or venue fees carry VAT, we ensure the input tax is reclaimed correctly.

Employment compliance, payroll and capital allowances

We review the engagement arrangements for your casual event staff and advise on employment status risk. Where staff are treated as employed, we run payroll and handle RTI submissions. We also review all mobile unit, trailer and equipment capital expenditure for available capital allowances, applying the AIA, FA 2026 FYA and WDA in the correct sequence.

Common questions

Do caterers always charge VAT at 20%?

Yes, on all catering supplies. Catering is standard-rated regardless of the food involved. The zero-rating that applies to cold food in a retail context does not apply when the supply is a catering service. A market stall caterer selling cold wraps to take away is still making a catering supply and must charge 20% once VAT-registered. See gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091.

Can I claim capital allowances on a food truck or trailer?

Yes. Kitchen trailers, portable kitchen equipment and refrigeration units are qualifying plant and machinery. The Annual Investment Allowance covers up to £1,000,000 of qualifying spend per year, and a 40% First Year Allowance is available from April 2026 on qualifying main-pool additions under Finance Act 2026 s.29 (gov.uk/capital-allowances/annual-investment-allowance). Whether a specific vehicle is classified as a van or a car affects the available allowances and requires a check against HMRC vehicle guidance at write time.

Are pitch and market fees deductible?

Yes. Pitch fees, market fees and venue hire costs paid by a caterer to trade at an event or market are allowable business expenses deductible from trading profit, provided they are incurred wholly and exclusively for the purposes of the trade. They should be coded consistently as a cost of sale or overhead and are deductible under normal trading expense rules.

Should a caterer use cash basis or accruals?

Cash basis has been the default for unincorporated sole traders and partnerships from 6 April 2024 (gov.uk/simpler-income-tax-cash-basis). For caterers with significant stock and equipment held at period end, accruals accounting typically gives a more accurate profit picture because it matches costs to the period in which the related income is earned. Where a caterer takes deposits in advance and carries forward stock or pre-purchased event supplies, an accruals election is worth considering. We advise on which method suits your model.