Ten reasons why you need a specialist accountant for your hospitality business

Saint’s Tourism & Leisure (ST&L) have many years experience in advising clients who run hotels, guest houses and holiday parks. Here are ten reasons why you need ST&L as part of your professional team.

1. Time of purchase

Whether you’re buying a hotel, guest house, or holiday park, we need to be involved at an early stage of your negotiations, and certainly before you sign a purchase contract.

We can give advice on the best apportionment of the purchase price for you, the stamp duty implications of the apportionment, and claims to tax relief via capital allowances, including those on items fixed into the property such as sanitaryware in en-suite bedrooms, etc.

2. Keeping an eye on gross profit margins

Amalgamating sales and all the associated purchases to produce one overall gross profit and GP% for the business may seem simple. But such a performance indicator can be masking the financial performance of the different sides of your business.

Food and beverage sales have associated direct costs, and margins on these specific areas can be masked by room sales which carry fewer direct costs in the form of guest supplies, laundry and booking commissions.

3. Specialist format accounts

While we offer a simple set of accounts for houses, hotels and holiday parks are diverse businesses with effectively lots of different income streams.

It is essential to see how each part of the business is doing, and to this end, we provide specialist format accounts for guest houses, hotels and holiday parks which show key performance indicators and the key cost areas.

Our accounts contain lots of graphs and pie charts so you can easily understand what the figures mean for your business.

4. Departmentalised payroll reporting

In a service led industry, payroll costs are one of the largest outgoings and need to be carefully monitored and controlled. In addition to processing payroll for PAYE and national insurance, we also provide departmentalised payroll reports, showing the cost of running each operation within your business.

Auto-enrolment pension costs also need to be factored into the overall cost of your staffing costs. We can set up a scheme for you, and make the necessary payments to your pension provider on your behalf.

5. VAT issues specific to tourism businesses

Advance guest deposits, cancellation fees, and gift vouchers are all part of hospitality business transactions.

There are special VAT rules regarding these types of transactions, and getting them wrong can mean either overpaying VAT or the risk of penalties for underpayment.

6. Dealing with tips and troncs

Guests like to leave gratuities to staff for good service. You, as an employer, probably want to ensure that tips are fairly shared between your staff, and the tips are subject to as few deductions as possible.

There are various ways to legitimately deal with tips, such as using a troncmaster, whereby tips will not be subject to national insurance contributions.

7. Benefits in kind specific to hotel staff etc.

Providing living accommodation to staff and meals while working can result in a tax charge for a benefit in kind.

We can assist with understanding the rules to reduce taxes and charges where possible, and complete the necessary tax year end P11Ds.

8. Business Plans and helping to raise finance

Obtaining funding has been difficult since the credit crunch, and financial institutions now look more closely at the financials.

ST&L can assist in reviewing the required figures and, if necessary, putting together a cashflow forecast or business plan specific to a hospitality business.

9. Tax Strategy on sale

The time of sale is another critical time to get ST&L on board. We can assist in preparing accounts specifically for the purposes of presenting the business in the best light for the purposes of sale.

Thereafter, we advise on the best apportionment of the sale price, how to minimise capital gains tax liabilities, and how to deal with capital allowances.

10. Inheritance Tax (IHT)

If you have a business in your estate on death, Business Property Relief (BPR) should be available, which reduces the value of your estate for IHT.

For many years now, HMRC have argued that a Holiday Park is effectively a rental business and denied BPR. ST&L’s Park Format Accounts are key to providing the necessary evidence that Park income is derived from services as well as pitch fees.

Get in touch with us to arrange a coffee and a chat with Saint’s Tourism & Leisure