Making Tax Digital · Sole traders
Mobile caterers and street-food businesses: tracking pitch fees, stock and fuel
ONLY£15A MONTHA successful event can generate large takings and equally substantial costs.
A successful event can generate large takings and equally substantial costs. Gross sales matter for MTD eligibility, while stock, pitch fees and other allowable costs affect profit. Keeping those figures separate helps a mobile catering business understand both compliance and the economics of each event.
Record the event from sales to settlement
Capture cash and card sales, refunds and event-organiser deductions. A payment after commission is not necessarily gross turnover. Keep the organiser statement and the agreement explaining the charges.
Assess food ingredients, packaging, pitch hire, commercial waste services and business fuel under the relevant rules. Stock or meals taken for private use need identifying. LPG for cooking and fuel for driving serve different functions, even if bought on the same day.
Separate the kitchen from the vehicle
A catering conversion, trailer, generator or durable kitchen item may need equipment treatment. Do not claim accounting depreciation as though it were the tax deduction. Vehicle acquisition and running costs also depend on the method used.
Cash basis and traditional accounting can recognise stock costs differently. Use a consistent basis and retain records of spoilage, refunds and supplier credits where they explain the figures.
Worked example: an event payout
An event produces £4,000 gross takings. The organiser retains £600, ingredients cost £1,200 and packaging costs £160. Before other costs, the simplified event contribution is £2,040.
The £3,400 settlement after organiser fees is not the original sales figure. A low profit margin does not mean the £4,000 gross income can be ignored when reviewing annual qualifying income.
Reconcile receipts, not just bank payouts
A bank deposit is not always the original sale. A platform, card processor or agent may deduct fees before sending you the balance. Keep the statement showing the gross amount, deductions, refunds and final payout, then explain the difference in your records.
Cash needs the same attention. Record customer cash when received under the cash basis, even if some of it is spent before the rest reaches the bank. Banking cash already recorded as a sale is a transfer between your cash and bank records, not another sale.
HMRC's record-keeping guidance covers income and business expenses. The useful practical test is whether another person could follow a payment from the original sale to the amount received without counting it twice.
Do not use bank feeds as a reason to ignore payment accounts, credit cards, cash or payments made personally for the business. List every place where business money passes, choose the source for each type of transaction and review transfers between those sources. This turns reconciliation into a repeatable check rather than a search through several unrelated statements.
Start with the business purpose
An expense category describes a cost; it does not decide whether the cost qualifies for relief. The starting point is whether the spending was for the trade. Where an identifiable part was private, keep that part out of the claim. A personal withdrawal is not an expense simply because it leaves the business bank account.
HMRC's self-employed expenses guide explains the distinction between running costs, capital expenditure and private use. For example, a supplier may sell both equipment and household products. The shop's name is useful evidence, but the invoice tells you what you bought.
Record the full transaction and the business calculation clearly. If a £120 bill has £30 of identifiable private spending, a £90 business claim is easier to explain when both amounts and the reason for the split are retained. Do not delete the private part merely to force the bookkeeping total to resemble the tax deduction.
Nor is a deduction a reimbursement. Spending £100 to save a fraction of that amount in tax still leaves you with a real cost. Buy what the business needs, keep appropriate evidence and claim the relief available under the correct rules.
Give equipment its own review
The tax treatment of equipment depends on the accounting basis and the asset, not just its price. Under the cash basis, many business equipment purchases are deducted when paid. Cars and certain other expenditure are exceptions. Under traditional accounting, a purchase with lasting business use may instead enter the capital-allowances calculation.
HMRC's capital-allowances guide explains the available routes. Annual Investment Allowance can cover qualifying plant and machinery, subject to its conditions and limit, but it does not apply to cars. Accounting depreciation is not itself the tax deduction.
Keep the purchase invoice, date, payment evidence and any finance agreement. A finance instalment can combine capital and interest, so treating every payment as an ordinary running cost may give the wrong answer. Record private use where relevant and retain the disposal paperwork when equipment is sold or part-exchanged.
For an expensive or unusual purchase, resolve the treatment before relying on a tax estimate. A category chosen from the merchant name cannot tell you whether an item was bought outright, leased, used privately or acquired as part of a larger building project.
Close each event while the detail is fresh
Save sales and settlement reports, count cash and identify stock used privately or wasted. Keep a job reference on major costs. Review the whole year for MTD eligibility rather than judging it from the cash left after one busy weekend.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.