Profit and Loss Accounts (page 3)

PRS and PPL – the Performing Rights Society and the Phonographic Performance Licences enable you to legitimately play music and put on live music in your pub. They are necessary evils and you should ensure you have the correct licence that reflects the activity you carry on in your pub. They are both based on pub size, customer numbers, type of music (and how it is played, back ground systems, live music etc), how often music is played and whether you charge admission or not. Make sure you have the correct entries in any application form as even the smallest of mistakes can be quite costly; either in over-payment of unnecessary fees or fines for not declaring enough. See my separate article on PRS and PPL

Business Rates

After rent/mortgage and staff payments, Business Rates are likely to be the most costly of all your overheads. By using a rating surveyor you can sometimes reduce this and get the reduction backdated for the previous two years.

See my guide on Business Rates for more guidance.

Council Tax

Whether you live on the premises or not (for instance you employ a live in manager or other live in staff) if there are private accommodations attached to the pub you will have to pay Council Tax. If you have no private quarters then make sure you are not being charged. Similarly if there are other domestic quarters in other parts of your building, but nothing to do with you, ensure you are not being charged for these (for instance on one pub I ran attached to the pub were two flats, owned and let out by the landlord that whilst integral to the structure of the premises had nothing to do with the business, and yes, the local council tried to charge the business for these dwellings!)


Water, Gas, Electricity and Telephones are all areas of expenditure that you can really make a difference to if you ensure that you have the best tariffs and your business is frugal with their use.

See my articles on controlling utility costs and energy contracts.

Staff Costs

Staff Wages and PAYE costs are likely to be your biggest single overhead and controlling the levels and rates of pay of your staff is probably the single biggest outcome you can achieve as a pub manager or owner. Understanding the patterns of trade (sometimes called seasonality or phasing) your pub is subject to and the trends of your business are essential tools in keeping staffing costs (and ancillary costs such as Employers National Insurance Contributions, payroll processing, pensions etc) to a minimum.

Repairs and Maintenance

Repairs and Maintenance (PPM) refers to all the cost of keeping your premises properly maintained and where necessary the cost of any repairs you effect. PPM is Planned Preventative Maintenance.

If you are a tenant, your tenancy agreement or lease will contain specific covenants that you require you to “keep and maintain” the premises; so you need to keep on top of repairs to avoid huge costs later and make provision for these repairs in your P&L.

Whether you are a tenant or a free-holder carrying out a planned programme of maintenance is essential; clearing gutters and drains, painting and decorating, whatever you have to do to keep a clean and safe environment for your staff and customers. Do not underestimate the costs of these works, they can be huge even if you know what you are facing, try and build up a reserve.

See my guide to Planned Preventative Maintenance.

Repairs and Maintenance To Fixtures & Fittings (F&F) , whether you inherit your fixtures and fittings (F&F) from the previous owner or have to buy them from a landlord you will need to make provision for keeping that F&F in good condition. Costs typically associated with this expenditure include replacement of broken furniture, worn carpets, testing and servicing of electrical or gas fittings and fire extinguishers.

Within your P&L you should also include the costs of replacing light bulbs (which are essential to running light fittings); although some accountants might prefer a “Comestibles” line in the P&L. (Comestibles and the items consumed by the business that do not necessarily return a profit napkins, light bulbs etc).

I prefer to include comestible costs associated with the bar and food accounts within those areas of expenditure / profit centre, for cleaning materials within cleaning, for toilet paper within hygiene. Where ever you record these items remember to budget for them and take account of them within your PPM programme (fire extinguisher servicing, PAT testing, boiler testing etc).

See my article on Fire Safety

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