Lexalytic

How do your numbers look from the outside?

HMRC publishes expected profit benchmarks for restaurants and compares filed returns against them automatically. A business can be entirely straight and still sit below the range, because delivery commission, discounting and waste all depress margin without appearing anywhere obvious in the accounts.

This shows where you sit, how much of any gap your own circumstances explain, and what records would evidence it. Everything runs in your browser and nothing is sent anywhere.

What kind of site is it?
The expected range differs by format, so this changes everything below.
Expected 65 to 70% gross, 3 to 6% net. The largest group and the one HMRC benchmarks most often.
Last full year
Food and drink only
Rent, utilities, everything else
As a % of turnover
What is pulling your margin down?
These are the legitimate reasons a well run site sits below benchmark. Being able to point at them, with records behind them, is the difference between a short conversation and a long one.
%
What share of turnover comes through Deliveroo, Uber Eats or Just Eat?
%
What share of covers are on a discount, set menu or offer?
%
Roughly what share of stock is wasted, spoiled or comped?
%
Roughly what share of food cost goes on staff meals?
%
What share of drinks purchases are tied to a pub company?
64.0%
Gross profit, expected 65 to 70%
5.7%
Net, expected 3 to 6%
66.8%
Prime cost, warning above 70%
What explains the gap
Delivery platform mix at 22%
6.6pt net
Waste and spoilage at 4%
3.6pt GP
2.8pt net
Discounting and offers at 15%
1.8pt GP
1.2pt net
Staff meals at 2%
1.7pt GP
1.2pt net
Your gross profit is 1.0% below the range, and the factors above account for roughly 1.0% of it. That accounts for it.
What would stand out
Gross profit 1.0% below the expected range
You are at 64.0% against an expected 65 to 70%. Consistently below benchmark is the single most common trigger for an enquiry, because it can indicate either unrecorded sales or overstated purchases.
18% of takings in cash
Not unusual for hospitality, but worth being able to show daily reconciliation between till, banking and declared takings.
Delivery platform income is reported to HMRC directly
Under the digital platform reporting rules, Deliveroo, Uber Eats and Just Eat report seller income to HMRC. Roughly £105,600 of your turnover will have been reported by them. Your own records need to agree with that.
What would evidence it

An assertion that delivery commission cost you three points is worth very little. The same claim with platform statements behind it is worth a great deal. These records are far easier to keep as you go than to reconstruct a year later.

Delivery platform mix
  • Platform statements showing commission deducted
  • The split between platform and direct sales in your till reports
  • Your platform menu prices against your dine-in prices
Waste and spoilage
  • A dated waste log kept as it happens, not reconstructed
  • Photographs or supervisor sign-off on significant write-offs
  • Stocktake variance reports showing the trend
Discounting and offers
  • Till reports showing discount codes applied by period
  • Copies of the offers that ran and the dates they ran
  • Any third party voucher settlement statements
Staff meals
  • A staff meal policy in writing
  • A log of meals taken, or a per-shift allowance applied consistently
  • Payroll records showing whether it is treated as a benefit
Keeping the records is the hard part, not the maths

You cannot reconstruct last year’s waste log once a letter arrives. Margin Manager keeps the operational side and the evidence side in one place, so the wastage record you keep to protect your margin is also the record that answers the question if it is ever asked.

See Margin Manager for hospitality

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Benchmark ranges are drawn from commonly published UK hospitality figures for 2026 and are indicative rather than an HMRC publication. The effect of each factor is a rough model, not a calculation of your actual position. This is a prompt to look at your own numbers and keep proper records. It is not tax advice, and if you have received an enquiry letter you should speak to an accountant or a tax investigation specialist rather than relying on this.

Questions

What gross profit does HMRC expect from a restaurant?

Commonly published UK figures for 2026 put full service and casual dining at sixty five to seventy per cent gross with three to six per cent net, quick service and takeaways at sixty five to seventy per cent gross with six to nine per cent net, and pubs at seventy to eighty per cent gross. Sitting consistently below the range for your format is one of the most common triggers for a compliance check.

Why is my restaurant gross profit below benchmark when I am doing nothing wrong?

The usual causes are delivery platform commission of twenty five to thirty five per cent, which reduces net margin without appearing in cost of sales, discounting and set menus, waste and spoilage, staff meals, and a tied supply agreement if you are a pub tenant. Each of these legitimately depresses margin, and each needs records behind it to be accepted as an explanation.

Does HMRC see my Deliveroo and Uber Eats income?

Yes. Under the digital platform reporting rules, platforms including Deliveroo, Uber Eats and Just Eat report seller income directly to HMRC. Your own records need to reconcile with what the platforms have reported, and a mismatch is visible without anyone having to look for it.

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