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Accountants for Convenience Stores and Retail Shops

For convenience stores, independent grocers, off licences, newsagents and small supermarkets. Daily takings reconciled, the VAT split right across the shop, stock and payroll under control and a margin you can see every month.

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What makes a shop different

Mixed VAT rates, real cash and a margin that moves weekly

A convenience store sells across both main VAT rates at the same counter all day. Cold food and newspapers are zero rated. Confectionery, crisps, soft drinks, hot food, alcohol and tobacco are standard rated. Nothing about the VAT return can be trusted unless the product file in the till is coded correctly, and the quickest way to overpay or underpay VAT for years is to leave that job half done.

Then there is cash, which has almost disappeared from most trades and has not disappeared from yours. Takings have to be reconciled daily rather than monthly, because a till difference you find the next morning is a conversation and one you find in nine months is a write off.

And the margin is thin enough that small things matter. Supplier price changes, promotional rebates, wastage, shrinkage and the wage percentage each move the bottom line more than they would in a business with a 60% gross margin.

Who we act for

Independent retail, in every shape

Convenience stores and local shops

Single site and multi site convenience stores, symbol group members and independent local shops, with or without a post office counter or a food to go offer.

Grocers and small supermarkets

Independent grocers, ethnic and specialist food stores and small supermarkets, where fresh produce brings wastage into the margin calculation.

Off licences and newsagents

Off licences and wine shops, newsagents and card shops, where the alcohol and tobacco mix drives both the VAT split and the licensing costs.

Forecourts and franchise sites

Shops attached to a forecourt or operating under a franchise or fascia agreement, where commission, fuel and shop takings have to be separated.

Daily reconciliation

The day balanced before it is filed away

The routine we put in is the same every day and takes a few minutes. Take the Z reading or the EPOS daily summary. Count and bank the cash, net of the float and any paid outs. Match the card settlement, remembering that it arrives a day or two later and net of the merchant fee. The three together should equal recorded sales, and whatever is left over is the till variance, which gets posted rather than buried.

Cards and cash each need their own treatment. Card income has to be recorded gross with the merchant service charge claimed as a cost, not netted off. Cash needs a banking record that can be tied to a specific day's takings. Paid outs, staff purchases, owner drawings from the till and the lottery or PayPoint float all have to come out of the sales figure rather than disappearing into it.

Your EPOS is doing most of this already if it is set up properly. We go through the product file with you, check the VAT codes against what you actually sell, and take the daily export into the books so the reconciliation is a review rather than a rebuild.

EPOS systems

We work with whatever till you already have rather than asking you to change it. What we need is a daily summary by VAT rate and a product file we can check. Where the till can export to your ledger we use it, and where it cannot we take the daily figures in a consistent format.

Packages

Company Core £99 a month
Company Growth £179 a month, books and VAT
Company Premium £299 a month, management accounts
Payroll £5 per employee per pay run above the included number
VAT registration and scheme advice £150

See all packages

VAT and retail schemes

The scheme follows your till, not your turnover

These are HMRC's standard retail schemes and their turnover limits, which HMRC measures on retail takings net of VAT.

VRSWhich scheme

Pick on whether your tills can split sales by rate.

Point of saleTills separate sales by VAT rate	£130m
Apportionment scheme 1Splits takings by purchase proportions	£1m
Apportionment scheme 2Uses expected selling prices	£130m
Direct calculation scheme 1Values your minority goods	£1m
Direct calculation scheme 2With an annual stock adjustment	£130m
Bespoke scheme agreed with HMRC	Over £130m

Apportionment and direct calculation are not available for catering, and apportionment scheme 1 cannot be used for goods you made yourself. A shop with a food to go counter needs that taken into account.

RTRates across the shop

One counter, both main rates, all day.

Most cold food for home consumption	Zero rated
Newspapers and magazines	Zero rated
Confectionery, crisps and soft drinks	Standard rated
Hot food and food eaten in	Standard rated
Alcohol and tobacco	Standard rated
Registration threshold	£90,000

The borderline cases in a convenience store are the ones that cost money: cakes against biscuits, cold sandwiches against hot, and anything sold to be eaten on the premises.

Stock, suppliers and people

Where the margin is actually won

Stock is the biggest number on a shop's balance sheet and the least often counted. A proper count at the year end, valued at cost, is what makes the gross margin real. Between counts we watch the margin by department, because a margin that slips two points without a price change is usually telling you about wastage, shrinkage or a supplier increase that was never passed on.

Supplier invoices need the same discipline. Delivery notes matched to invoices and to statements, credits chased, promotional allowances and retrospective rebates recognised in the right period, and duty and deposit charges separated out. Symbol group statements in particular bundle several things together and need unpicking.

Then payroll, which is the second largest cost. Payslips and real time information submissions, National Minimum Wage checked across the age bands as staff have birthdays, holiday pay for variable hours staff, and auto enrolment pensions with new starters assessed each time. The wage percentage against sales is the figure we put in front of you every month.

Packages

Company Growth £179 a month
Company Premium £299 a month
Payroll from £25 a month, director only scheme
£5 per employee per pay run above the included number
Virtual finance department from £450 a month

See all packages

Year end

Accounts and tax, built from the daily records

Statutory accounts

Accounts prepared from reconciled records and filed at Companies House, with the stock, the margin and the wage percentage explained to you on a call rather than emailed over as a PDF.

Corporation Tax or Self Assessment

A CT600 for a company, or the self employment pages of your Self Assessment return for a sole trader or a partnership, with capital allowances claimed on shop fit, chillers and equipment.

Filings and compliance

Confirmation statement, Companies House identity verification, dividend paperwork where profits are drawn that way, and the director Self Assessment returns.

Planning before the year end

Equipment bought before the year end rather than after it, the salary and dividend mix, and whether a second site should sit in the same company.

Fees

Published, and quoted before we start

A single site shop normally sits in Company Core at £99 a month if you keep your own daily records, or Company Growth at £179 a month if you want the bookkeeping and the VAT returns done for you. Company Premium is £299 a month and adds monthly management accounts, which is where multi site shops usually end up.

Payroll is from £25 a month for a director only scheme, with £5 per employee per pay run above the number included in your package. VAT registration with scheme advice is £150 as a one off, and a Self Assessment return on its own starts from £120. Final fees depend on the complexity of your tax affairs and a fixed quote is provided before any work begins.

For a group of shops, the virtual finance department is priced after a scoping call and is typically from £450 a month.

Packages

Company Core £99 a month
Company Growth £179 a month
Company Premium £299 a month
Payroll from £25 a month
Self Assessment tax returns from £120

Request a fixed fee quote

Questions

Frequently asked

Which VAT retail scheme should my shop use?

If your tills can separate sales by VAT rate, the point of sale scheme is the simplest and the most accurate, and it has a turnover limit of £130 million so size is not the issue. If they cannot, an apportionment or direct calculation scheme estimates the split, and those have limits of £1 million or £130 million depending on which version. The right answer usually comes down to how well your EPOS is set up rather than how big you are.

My till reading never matches the cash banked. Is that a problem?

Small differences are normal in a cash business and what matters is that they are recorded rather than absorbed. We reconcile the Z reading to cash banked plus card settlement plus paid outs, post the difference to a till variance account and watch the trend. A steady small variance is housekeeping. A growing one is information.

What is standard rated and what is zero rated in a convenience store?

Most cold food for home consumption is zero rated, and so are newspapers. Confectionery, crisps, soft drinks, hot food, alcohol and tobacco are standard rated. A single shop therefore sells across both rates all day, which is why the product file in your EPOS has to be coded correctly before any VAT return can be relied on.

Do you handle the payroll as well?

Yes. Payslips, real time information submissions, National Minimum Wage checks across age bands, holiday pay for part time and variable hours staff, and auto enrolment pensions including assessing new starters. Payroll for up to two people is inside Company Growth and up to ten inside Company Premium, with £5 per employee per pay run beyond the included number.

We have more than one shop. Can you handle that?

Yes, and the reporting matters more than the bookkeeping at that point. Each site needs its own gross margin, wage percentage and stock position so you can see which shop is carrying which. That is what the management accounts in Company Premium are for, and for larger groups the virtual finance department.

What about the business rates and the licences?

We will tell you what relief your shop may be entitled to and make sure the rates, the premises licence and the alcohol and tobacco licensing costs are in the accounts in the right place. The relief itself is applied for through your local authority and we can help you prepare it.