Food Truck and Street Food Vendors — Tax and Expenses Guide

The Accounted Business Team·1 March 2026·8 min read

Street food and food trucks are booming across the UK. From gourmet burgers at weekend markets to loaded fries at music festivals, mobile catering has become a serious business. But between the exciting bits — developing your menu, customising your van, building your following — there's the tax side. And getting it right from the start saves you from some very unappetising problems down the line.

This guide covers everything food truck owners and street food vendors need to know about UK tax for the 2025/26 tax year. We'll tackle expenses, VAT on hot food, record-keeping for cash-heavy businesses, and more.

Getting Set Up — Registration and Licences

Registering with HMRC

If you're running a food truck or street food business, you need to register as self-employed with HMRC within three months of starting to trade. Once registered, you'll need to file a Self Assessment tax return each year.

Food Business Registration

Separately, you must register your food business with your local council at least 28 days before you start trading. This is a legal requirement under food hygiene regulations, and the council may inspect your vehicle and preparation areas.

Street Trading Licence

Most local authorities require a street trading licence or consent to sell food in public spaces. The cost varies by area — some councils charge a few hundred pounds a year, others significantly more for prime locations. The good news? This cost is a fully allowable business expense.

Other Licences and Permits

Depending on your setup, you might also need:

A food hygiene certificate (Level 2 minimum)
Gas safety certification for your vehicle
Public liability insurance
Market pitch fees or event trader passes

All of these costs are tax-deductible.

How Much Tax Will You Pay?

You'll pay tax on your profit — that's total income minus allowable expenses.

Income Tax Rates for 2025/26

Personal allowance: £12,570 tax-free
Basic rate: 20% on profits between £12,571 and £50,270
Higher rate: 40% on profits above £50,270

National Insurance

Class 2 NI: £3.45 per week (£179.40 per year)
Class 4 NI: 6% on profits between £12,570 and £50,270

Food truck businesses can have high turnover but tight margins once you factor in ingredients, pitch fees, fuel, and vehicle costs. That's why claiming every legitimate expense is so important — it directly reduces the tax you pay.

For a detailed breakdown, see our guide on how much tax sole traders pay.

Allowable Expenses for Food Truck Businesses

Street food businesses come with a wide range of claimable expenses. Here's what you should be tracking:

Vehicle Costs

Your food truck or van is the heart of your business, and there are two ways to claim vehicle costs:

Option 1 — Simplified mileage expenses:

45p per mile for the first 10,000 business miles
25p per mile after that

This is straightforward but might not reflect the true cost of running a large vehicle. Our mileage guide explains this method in detail.

Option 2 — Actual costs:

Fuel
Insurance
Road tax
MOT and servicing
Repairs and maintenance
Vehicle loan interest
Breakdown cover

If you use the vehicle purely for business, you can claim 100% of these costs. If there's any personal use, you'll need to work out the business proportion.

For the food truck itself, if you've bought or converted a vehicle specifically for the business, the cost can be claimed through capital allowances.

Food and Ingredients

Raw ingredients (meat, vegetables, sauces, spices, etc.)
Cooking oils and fats
Condiments and garnishes
Packaging (containers, napkins, bags, cutlery)
Drinks for resale

Keep all supplier receipts and supermarket receipts. If you're buying in bulk from a wholesaler, the invoices are your record. If you're popping to the supermarket for fresh ingredients, photograph every receipt.

Equipment

Cooking equipment (grills, fryers, griddles, bain-maries)
Refrigeration units
Generator
Serving equipment
Till or POS system
Card payment terminal
Fire extinguisher and first aid kit
Gas bottles and connectors
Cleaning equipment

Pitch and Event Fees

Market stall fees
Festival and event pitch fees
Private event booking fees (the pitch cost, not the income)
Street trading licence fees
Parking fees for your vehicle at events

Premises Costs

If you have a prep kitchen, commissary, or storage unit:

Rent
Utility bills
Insurance
Cleaning

If you do admin and menu planning from home, you can claim a proportion of your household costs. Our work from home expenses guide has the details.

Marketing

Social media advertising
Website and online ordering platform
Printed menus, banners, and signage
Vehicle graphics and wraps
Photography for social media
Business cards

Insurance and Safety

Public liability insurance
Product liability insurance
Vehicle insurance
Employer's liability insurance (if you have staff)
Food hygiene courses and refresher training
Health and safety training

Professional Services

Accountancy and bookkeeping fees
Legal costs (licensing, contracts)
Food hygiene consultancy

Check out our complete list of sole trader expenses for the full picture.

VAT for Food Truck Businesses

VAT is where things get properly interesting for street food vendors. The key rule to understand is this:

Hot takeaway food is standard-rated for VAT at 20%.

This means that if your taxable turnover (including hot food sales) exceeds £90,000 in a rolling 12-month period, you must register for VAT and charge 20% VAT on your hot food sales.

What Counts as Hot Food?

Food that is:

Heated for the purpose of being consumed hot
Kept warm after cooking
Supplied hot to the customer

This covers virtually everything sold from a food truck — burgers, burritos, noodles, fries, toasties, you name it. Cold sandwiches and salads are zero-rated, but that's not what most food trucks are serving.

What This Means for Your Pricing

If you need to register for VAT, you'll either need to:

Absorb the 20% VAT within your current prices (reducing your margin)
Increase your prices by 20% (potentially losing customers)
Find a middle ground

Many food truck owners dread hitting the VAT threshold because of the pricing impact. It's worth planning for it early and building VAT into your financial projections.

The Flat Rate Scheme

For catering businesses, the flat rate VAT percentage is typically 12.5%. Under this scheme, you charge VAT at 20% but pay HMRC a flat 12.5% of your gross turnover. The difference is yours to keep. For businesses with relatively low input VAT (which food trucks often have, since ingredients are zero-rated), the flat rate scheme can save you money.

For more detail, read our VAT registration guide.

Record-Keeping for Cash-Heavy Businesses

Street food businesses often deal with a lot of cash, and this is something HMRC pays close attention to. Here's how to keep your records bulletproof:

Daily Takings

Record your total takings for every trading day — broken down by cash and card. Many food truck owners use a POS system that does this automatically. If you're using a cash tin and a card reader, reconcile both at the end of each day.

Till Rolls and Z-Readings

If you use an electronic till, keep the end-of-day Z-readings. These are your primary evidence of daily sales.

Purchase Records

Keep every receipt from every supplier. If you buy from a cash-and-carry or wholesale market, those invoices are critical. Photograph them immediately — they have a habit of getting grease-stained and illegible.

Separate Bank Account

Open a dedicated business bank account and deposit all your takings into it. Don't dip into cash takings for personal spending — it creates a nightmare for your bookkeeping.

Using an app like Accounted helps enormously here. Connect your business bank account, and Penny will match transactions and categorise your income and expenses automatically. You'll have a clear picture of your finances without having to piece it all together from scraps of paper.

Seasonality and Cash Flow

Food truck businesses often have seasonal income — busy during summer festivals and markets, quieter in winter. This matters for tax because:

Your tax bill is based on your annual profit, not monthly income
You need to set money aside during busy months to cover quieter months and your tax bill
Payments on account (advance tax payments) are based on last year's bill, which might not match this year's income pattern

A good rule of thumb: set aside 25-30% of your weekly profit into a separate savings account for tax. During your busy season, this builds up a healthy buffer.

Growing Your Food Truck Business

As your business grows, you might consider:

Adding a second truck — this multiplies your income but also your expenses and complexity
Hiring staff — you'll need to run PAYE and manage employer obligations
Moving to a permanent location — transitioning to a restaurant or fixed kiosk
Incorporating — becoming a limited company for tax efficiency

Each of these steps has tax implications, so plan carefully and consider getting professional advice at those transition points.

Wrapping Up

Running a food truck is hard work, but the tax side is manageable with the right approach. Register early, keep meticulous daily records (especially of cash takings), claim every legitimate expense, and plan for VAT from the start. The businesses that get their finances right from day one are the ones that thrive — leaving you free to focus on perfecting your menu and building your brand.

Accounted helps UK sole traders stay on top of their bookkeeping and tax. Start your free 30-day trial at getaccounted.co.uk

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