Pub Trade Guidance

Accounting

Energise

Accounting Services to the Bar and Licensing Trade

 

Energise Accounting, 82 Shaftesbury Avenue

Coventry CV7 8NE

 

Tel 02476 335708 | Mbl 07392 030625

 

mike@energiseaccounting.co.uk

 

Pub Trade Guidance

The Pub Trade Guide

This Pub Trade Guide is a basic introduction to the pub trade and covers the different types of things you need to consider before taking on a pub.

 

Key skills!

  • Late nights, early mornings
  • Working under pressure
  • Confident and sociable

 

Also in the guide:

  • Trading styles of pubs
  • Types of pubs and agreements
  • The business plan, stocktaking and accounting
  • Maintaining high profits

 

PDF - The Pub Trade Guidance

 

 

 

--------------------------------------------------------------------------------------------------------------------------------------

 

MRO Comparison Guide

Comparing Market Rent Only to a Tied Agreement

 

PDF - MRO Guide

 

 

--------------------------------------------------------------------------------------------------------------------------------------

 

 

Choosing a Pub Accountant for Leasehold and Tenancy Agreements

Pub Cos supply an excellent opportunity for people to enter the pub trade at a fairly low cost. However, caution must be taken when appointing professionals such as accountants and stocktakers.

 

The Issue

Some Pub Cos will try and get you to sign up with their advised suppliers and then what happens is the Pub Co will invoice you for their services and pay the accountant or stocktaker. Here lies a problem you as the leaseholder or tenant are in reality not the client. The fact is the accountant or stocktaker would not even have to speak to you in reality and just send all their instructions via the ABM. This in our opinion leaves the leaseholder or tenant vulnerable.

 

The Solution

When speaking to the area ABM explain from the outset you wish to employ your own professional independent advisors such as:

  • Accountants
  • Solicitors
  • Stocktakers
  • Surveyors

This is not normally a deal breaker as the Pub Co will prefer someone to take over the pub on a permanent basis however, if they insist, our advice is walk away as quick as you can as you are leaving yourself vulnerable.

 

---------------------------------------------------------------------------------------------------------------------

 

Are Living Accommodation Expenses Tax Deductible?

For the business owner living in the accomodation unfortunately not these expenses are not associated with the cost of running the business further more you will have to pay council tax and for a separate TV licence.

 

If you employ a manager and choose not to live in the pub yourself accommodation expenses are tax deductable and it is usual for the manager to pay the Council tax and TV licence fee.

 

If you employ live in staff such as a chef and bar staff the cost of supplying them accommodation is also tax deductable

 

---------------------------------------------------------------------------------------------------------------------

 

Things to think about when applying for a pub

  • Always use independent Professionals
  • Visit the pub several times at different times of the week
  • Never make emotional decisions; there will always be another opportunity
  • The ABM will nearly always say there are other applicants; don’t let this phase you or rush any decisions
  • Make sure any work that is suggested by your surveyor has been completed before you move in
  • Pay a Licensed Trade Accountant to do your business plan (a good one will check everything possible). If you cannot afford one, you cannot afford to take on a pub
  • Make sure all the electrical appliances have been recently tested. Make sure the boiler has been recently serviced
  • Although the pub trade is hard work you should enjoy it but always remember you are running a business
  • Take the advice of your professional advisors, after all that is what you pay them for.

 

---------------------------------------------------------------------------------------------------------------------

 

Taking over from an existing leaseholder

Leaseholders who have signed a transferable leasehold agreement are free to sell on the remaining term of the lease.

 

  • You will nearly always have to pay a premium for these as the existing leaseholder has done all the hard work building up the business.
  • Find out how long they have been at the pub
  • Ask why they are leaving
  • You will want to see at least two years accounts before taking over the business.
  • Make sure they have been keeping up with their repair obligations; ask to see all relevant invoices
  • Make them do any repairs as advised by your surveyor before you sign
  • Get the fixtures and fittings valued
  • Find out when the next rent review is due
  • Tell them to make redundant any staff you will not need; for example they may employ a manager
  • Remember the outgoing person will only highlight the good points; look for some negatives in order to reduce the price
  • The relevant points from above

 

Buying a freehold business

Many of the main points have been covered above and apply just the same level of attention to detail, however here are a few extra considerations.

 

  • Consider how you are going to form your business structure e.g. Ltd Company, Partnership or Sole Trader.
  • If you are obtaining finance try and get 3 separate quotes
  • Compare supplier prices as the savings can be huge in some cases

 

 

 

Copyright © 2017 Energise Accounting - All Rights Reserved