An accountant’s guide to… Starting a pub venture

At Duncan Boxwell & Company, we have worked alongside many enthusiastic and successful business owners for decades, helping them achieve their goals.

According to the British Beer & Pub Association there were 50,800 pubs in the UK in 2015, which makes it a highly competitive market. This is why at DB&Co we feel that having the right strategy, plan and support is important.

Whether you are starting up a new business, maintaining an organic growth, or planning your exit strategy – this short but comprehensive guide is for you.

Let’s start with a few simple questions:

  • What are your business objectives?
  • What is the long term plan?
  • Which legal structure is most suited to your business plan?
  • What is your personal tax position?
  • What is the structure of the management team?
  • What is the growth plan?
  • What is the exit plan?

Now that you have a vision in mind, let us help you make that vision a reality!

Common questions

Below are a small selection of questions that we get asked frequently. We hope that you find our answers helpful.

If you have additional queries or you would like a more in-depth discussion, please do not hesitate to get in touch.

What options are available for the legal structure of the business?

Sole trade, partnership, limited company and limited liability partnership (LLP).

For a reasonable sized pub business, incorporation is likely to be most beneficial. This could naturally lead into a group structure with advantages at a later stage.

How can I raise the necessary capital for the new business?

Lenders will happily provide loans if you have a good business plan. At DB&Co, we have helped many clients with their business plans, forecasting and budgeting, leading to successful loan applications.

We work in partnership with a number of finance providers, for whom we are authorised brokers in the UK.

Can you advise on the internal systems required for the business to take off?

An effective administrative and book-keeping system is key to the smooth running of a business.

At DB&Co, we provide our clients with the most appropriate systems, using the latest technology. It is crucial to capture data at the inception of a transaction so that least amount of manual data entry is required and thus risk of error is minimised.

We are a member of Sage Accountants Network and a Certified Pro Advisor for Quickbooks.

How can I monitor the performance of my business throughout the year?

Bank statements can be misleading as a guide to business performance. Management accounts, on the other hand, will provide an up to date picture of how well the business is doing, the return on investment (ROI), the variation in margins, key performance indicators (KPIs) and potential areas for cost control. At DB&Co, we work with our clients to ensure they understand the implications of management accounts. Feedback from our existing clients indicates that this is a highly valued service.

Will you advise on my statutory requirements?

We will set up PAYE, VAT registration, etc and act as your agent with HMRC. We will also advise on any other compliance matters.

Can I reduce my tax liability?

Tax planning, as the name suggests, takes place along the way. We arrange regular meetings with clients to review management accounts and future plans. We have successfully used AIA claims for 100% relief, R&D claims for 230% relief, EIS claims and many others to obtain substantial tax refunds.

Pub businesses tend to involve a large capital expenditure upon setup for fit-out, which will lead to capital allowance claims, with rates varying from 8% to 100% for tax relief.

Research and development activities are highly encouraged by the government in the recent years. We have seen more and more businesses in the food and beverage industry claiming R&D relief for projects that take place in their micro-breweries and kitchens.

Why does my tax position matter?

In order for us to carry out effective tax planning for the company and for yourselves, we will need to know the overall picture so that we can advise how you can extract profits from the business in the most tax efficient way.

Can I treat myself to a company car without a big tax penalty?

The answer is Yes!! Talk to us and you may be pleasantly surprised!

How can I extract profit from the business in a tax efficient manner?

This is a big question, which will lead to many questions from us. What are the retained earnings in the business? What is the purpose for extracting profit, i.e. commercial or private? How soon will the funds need to be in place? We will advise accordingly on a case by case basis.

Why do I need a long term plan for the business?

Company structures cannot be changed at the last minute. Businesses evolve all the time and the original structures might not be appropriate as time goes on. Advanced planning for an exit strategy could enable a smooth exit and minimise tax.

We hold regular workshops, seminars and networking events in the Cheshire and Wirral areas. We look forward to meeting you in the near future!