Tax Guide for Caterers and Event Food Businesses

The Accounted Business Team·22 February 2026·6 min read

Running a Catering Business? Here Is Your Tax Guide

Catering is a demanding profession. Long hours, perishable stock, seasonal demand, and the complexity of VAT on food all make bookkeeping more involved than many other self-employed trades. Whether you run a mobile catering van, provide buffets for corporate events, or cook for weddings and parties, getting your tax right is essential.

This guide covers the key expenses, the VAT rules on food, and practical tips for the 2025/26 tax year.

Registering Your Catering Business

As a self-employed caterer, you need to register with HMRC as a sole trader if your income exceeds £1,000 per year. You also need to register your food business with your local authority at least 28 days before you start trading. This is a legal requirement under the Food Safety Act, separate from your tax registration.

If you operate from home, your domestic kitchen may need to meet food hygiene standards and could be subject to inspection by your local Environmental Health Officer.

Food and Ingredient Costs

Food is your primary cost of sale and is fully deductible. This includes all ingredients purchased for client events, food for tasting sessions with prospective clients, and waste — spoiled or unused ingredients bought for a specific event.

Managing Perishable Stock

Unlike many businesses, caterers cannot stockpile inventory indefinitely. Fresh ingredients must be purchased close to the event date. This means your expenses tend to cluster around event dates rather than spreading evenly. Under cash basis accounting, you claim the expense when you pay for the ingredients, regardless of when the event takes place.

Personal Consumption

If you buy ingredients in bulk and use some for personal meals, you must only claim the business portion. Keep clear records of what was purchased for which event.

Equipment

Kitchen Equipment

Commercial-grade equipment qualifies for capital allowances under the Annual Investment Allowance. This includes ovens, hobs, and ranges, refrigerators and freezers, food processors, mixers, and blenders, chafing dishes, bain-maries, and hot holding units, serving equipment (platters, tureens, glassware, cutlery), cool boxes and insulated transport containers, and gazebos, tables, and chairs for outdoor events.

If you use domestic kitchen equipment partly for business, claim the business-use proportion.

Small Items

Items like knives, chopping boards, disposable gloves, foil, cling film, napkins, and disposable plates are revenue expenses, claimable in full in the year of purchase.

Vehicle Costs

Most caterers need a vehicle to transport food, equipment, and staff to events.

Van or Car

If you use a vehicle solely for business, the full running costs are claimable — fuel, insurance, road tax, MOT, servicing, and repairs. If the vehicle has mixed personal and business use, claim the business proportion. Alternatively, use HMRC's mileage rates: 45p per mile for the first 10,000 business miles, 25p after that.

Vehicle Hire

If you hire a larger vehicle for specific events — a refrigerated van for a summer wedding, for example — the hire cost is fully deductible as a business expense.

Staff for Events

Casual Staff

Many caterers hire waiting staff, kitchen assistants, and bar staff on a casual basis for events. How you pay them determines the tax treatment.

If the workers are genuinely self-employed — they work for multiple caterers, provide their own uniform, and invoice you for their services — their fees are a business expense. Keep their invoices.

If you control how, when, and where they work, provide their uniform, and they work regularly for you, HMRC is likely to consider them employees. You would need to register as an employer and operate PAYE, including Real Time Information (RTI) reporting.

Agency Staff

If you use a catering staffing agency, the agency handles PAYE. The agency invoice to you is a straightforward business expense.

Food Hygiene Certificates

A Level 2 Food Hygiene Certificate is a minimum requirement for anyone handling food commercially. The cost of obtaining and renewing food hygiene qualifications for yourself and your staff is fully deductible. This includes the Level 2 (basic), Level 3 (supervisory), and Level 4 (management) certificates, allergen awareness training, and first aid training relevant to a food environment.

Insurance

Public Liability Insurance

Public liability insurance is essential for any catering business and is often required by venues and event organisers. The premium is fully deductible.

Product Liability Insurance

Product liability insurance covers claims related to illness caused by your food. It is usually included in or bundled with public liability policies. The cost is deductible.

Employer's Liability Insurance

If you have employees (even casual ones), employer's liability insurance is a legal requirement. The premium is deductible.

Equipment Insurance

Cover for your kitchen equipment, especially if you transport it to events, is claimable.

VAT on Food: The Complicated Part

VAT on food is one of the most complex areas of UK tax, and it trips up many caterers.

The Basic Rule

Most food is zero-rated for VAT — you do not charge VAT on it. This includes raw ingredients, basic groceries, bread, fruit, vegetables, meat, fish, and dairy.

Catering Is Different

Here is the critical distinction: catering is standard-rated at 20% VAT, even though the food itself might be zero-rated if sold in a shop. HMRC defines catering as the supply of food in the course of catering, which includes food prepared and served to order, hot food supplied for consumption (hot takeaway), food supplied together with a service (waiting staff, table settings), and buffets and platters supplied with a delivery and setup service.

In practice, almost everything a caterer does falls into the standard-rated category. You are not simply selling food — you are providing a catering service.

When You Must Register

If your taxable turnover (which includes your standard-rated catering income) exceeds £90,000 in any rolling 12-month period, you must register for VAT and charge 20% on your catering services.

Input VAT Recovery

Once registered, you can reclaim VAT on your business purchases — equipment, ingredients (though most food ingredients are zero-rated, so there is no input VAT to reclaim on those), vehicle costs, and other standard-rated expenses.

The Flat Rate Scheme

Caterers on the Flat Rate Scheme pay a fixed percentage of gross turnover to HMRC instead of calculating input and output VAT on every transaction. The flat rate for catering services is 12.5% of gross turnover. This simplifies your VAT return but means you cannot reclaim input VAT on individual purchases. It works well for caterers with relatively low expenses compared to turnover.

Market Stall and Venue Fees

If you trade from a market stall, food festival, or pop-up location, the pitch fees, stall rental, and any associated costs are deductible. If you pay a commission to a venue or event organiser, that commission is also deductible.

Marketing

Website hosting, social media advertising, printed menus and business cards, food photography, and tasting event costs are all claimable marketing expenses.

National Insurance

Class 2 NI is £3.45 per week (if profits exceed £6,725). Class 4 NI is 6% on profits between £12,570 and £50,270, then 2% above that.

Record-Keeping

Keep all invoices, ingredient receipts, staff payment records, event contracts, insurance documents, vehicle records, food hygiene certificates, and bank statements. HMRC requires records for at least five years after the filing deadline. For food businesses, Environmental Health may also request access to certain records during inspections.

Serve Great Food, Let Accounted Serve Your Books

Catering involves a tangle of food costs, VAT complexities, and event-by-event expenses. Accounted handles it all — connecting to your bank, categorising every purchase, and keeping your VAT records straight. Penny, your AI bookkeeper, learns the difference between zero-rated ingredients and standard-rated catering supplies, and tracks your turnover against the VAT threshold so you are never caught off guard. Start your free trial with Accounted and let Penny manage the books while you focus on the food.

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