Key Steps to Get You Off to a Great Start

We’ve worked with dozens of startups in the hospitality industry, from pubs, bistros and B&Bs to hotels, restaurants and visitor attractions. In our experience, it’s vital to take some time out to

1. Decide what type of business entity is right for you

• Sole trader – you and your business are the same entity
• Partnership – similar to a sole trader, but with more than one person
• Limited company (incorporated entity)

The sole trader and partnership options are ideal for most small and medium-sized hospitality businesses, because they are relatively easy to set up. It’s easy to maintain compliance with the authorities, and you’re much less constrained by statutory legislation than a limited company.

There are two main reasons why you might want to incorporate as a limited company:
• to limit your personal liability on company debt
• for tax efficiency

But be careful – there are many misconceptions here.

If you incorporate, your main creditors (usually the bank and the brewery) will require that you sign a personal guarantee against money you owe them. This means you may become personally responsible for paying them yourself.

Historically, there have been significant tax benefits to incorporation, this has mainly been on class 4 National Insurance contributions rather than Income Tax by using dividends to extract profits. Tax on dividends has since been increased thus reducing some of their benifit

For the most upto date information on this issue we suggest that you visit the relevant page on the HMRC website

2. Register Your Business with the Authorities.

You’re legally required to do this within three months of the start of trade. If you don’t, you can incur costly penalties. We are happy to prepare and submit your registration requirements on your behalf but also provide below links to the relevant areas of HMRC website. Should you wish to discuss these matters with us please do not hesitate to contact Paul: e mail or telephone 01620 826 060

Sole traders need to register
• For VAT
• For machine gaming duty
• As self-employed

Partnerships need additionally to register
• The partnership itself
• The partnership for VAT
• Each individual partner for self-assessment

Limited company directors need to register
• Themselves for self-assessment
• The company for corporation tax.

Here are some useful links:

Sole trader/partner and partnership registration

VAT Machine Gaming Duty

Company director Corporation tax

3. Prepare a Business Plan

Take time out to do this! It doesn’t have to be long or complicated but is an invaluable reference tool once you start trading. A business plan should be like a living organism that keeps evolving to reflect your ongoing short, medium and long-term objectives.

Your plan should also include a basic set of profit and cash flow projections. If you need to borrow money, your bank or funder will insist on this. However, the real benefit is that it gives you targets for sales, gross margins and your expenses budget.

4. Set Up a Bookkeeping System

Decide how you’re going to keep your accounting records. This doesn’t need to be complicated or technical, but it must comply with basic requirements. Put something in place before you start trading, because once you start to trade, you’ll have a million and one other things to think about.

For all but the very smallest micro businesses the days of manual bookkeeping using pen and paper are gone, particularly since the introduction of MTD (Making Tax Digital) for VAT registered businesses. It is now a legal requirement to record and maintain records electronically. The Hayhoe Webb Partnership offers a number of solutions to your bookkeeping requirements.

We are Xero specialists and as such can help you set up and train you in the use of the platform, or alternatively, do the whole lot for you.

Get your business off to the best possible start. Call us on 01620 826 060
Or email
for a confidential no obligations chat

Business Start-up

If you’re thinking of opening a pub, restaurant, B&B or other hospitality business in East Lothian, the Hayhoe Webb Partnership can provide invaluable support.

Business Growth

When you want to grow your hospitality or tourism business and are looking for sound business advice from an expert in hotel, pub and licensed management we're here to help.

Business Rescue

If your finances are floundering and you need to take control of your hospitality business to square things with the tax man, The Hayhoe Webb Partnership are a safe pair of hands.


Not many people in the hospitality trade love bookkeeping – but someone’s got to do it! It’s a legal requirement and Hayhoe Webb are experts.