Specialist Accountants for Restaurants & Hospitality
The UK hospitality and hotel industry is estimated to have contributed £41 billion gross to the Exchequer in 2014. According to estimates from the Oxford Economics official data of employment, the hospitality industry is the UK’s fourth biggest industry in employment terms, accounting for 8.8 per cent of total employment. To make a comparison with another buoyant industry, the digital and creative industry is estimated to have supported 2.3 million jobs in contrast to the hospitality industry’s 2.9 million.
In addition to the industry-dedicated jobs, add an estimated contribution of an average of 1 per cent of all investment in the UK economy on new hotel construction and investments on items such as new furniture and equipment for venues. In this respect, the hospitality industry is estimated to have sustained 43,000 jobs in 2014 across industries such as construction, furniture manufacturing, equipment manufacturing, and IT services.
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.
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:
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
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?
Visit The Pensions Regulator website, where a handy time planner is available, as well as all the information about auto-enrolment duties for employers.
DNS’s specialist accounting services for the hospitality industry really will make a difference. As your accountant, we undertake a lot more than just doing the books and filing statutory documents. With sustainable business growth our aim as it is yours, DNS provide cloud-based bookkeeping and accounting services free as part of our service. This software called Nomisma is at the heart of our integrated approach to accounting for the hospitality industry. You can view videos about how it works here. Not only will it ensure you develop strong in-house systems, but this regime of real-time accounting for account manager and client, enables at the press of a button retrieval of all relevant reports and data to ensure that you stay on top of all elements of compliancy. With DNS undertaking your payroll and Nomisma helping you implement new legislation into your systems, the affects of the NLW/NMW as well as the introduction of your work-based pension scheme will be automatically updated on the system and provide real-time analysis of the impact of these changes on the growth of your business.
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