Restaurant Chart of Accounts in Xero: UK Delivery Setup

Corrected on 2026-08-10 (second correction, same date): this guide previously said commission input VAT was recoverable "only to the extent your sales are standard-rated" and that a mixed hot/cold menu required partial exemption. That was wrong — zero-rated supplies are taxable supplies and do not restrict recovery, so the commission VAT is reclaimable in full (VAT Notice 700). The VAT treatment note and the VAT-return mapping have been rewritten, and now agree with the downloadable chart-of-accounts template. Corrected on 2026-08-10: the linked chart-of-accounts template was described as something you "can import directly into Xero or QuickBooks" — corrected to "adapt into Xero or QuickBooks," following a 17.4 content-accuracy review. The template's VAT treatment is written as plain-English notes rather than software tax codes, so it needs manual mapping rather than a direct import.

A well-designed chart of accounts (COA) is the invisible infrastructure behind clean management reporting, accurate VAT returns, and defensible HMRC submissions. For UK restaurants on delivery platforms, the default Xero chart of accounts is not quite right out of the box — it lacks the specific codes you need to separate platform revenue from dine-in revenue, track commission VAT correctly, and roll up to the right totals for HMRC's Digital Platform Reporting Rules. (For the wider picture of what Xero does and does not handle for delivery, see our guide to using Xero for restaurant delivery accounting.)

This guide walks through the specific account codes a UK restaurant on Deliveroo, Uber Eats, or Just Eat should add to their Xero chart of accounts, and the reasoning behind each addition. It is written for owner-operators and their bookkeepers — not for accountants, who already know this but may not have set it up yet. The chart of accounts is one piece of a wider Xero setup; for the full configuration, see our Xero for UK hospitality delivery-era setup guide.

Why the default Xero chart of accounts is not enough

Xero's standard UK chart of accounts covers general small business requirements: sales, cost of goods sold, salaries, rent, utilities, and standard VAT categories. For a restaurant without delivery platforms, it is a reasonable starting point. For a restaurant with delivery platforms, it leaves several gaps:

• No platform-specific revenue codes — all delivery income gets lumped into a single "Sales" code, losing the ability to analyse platform profitability
• No commission expense codes — platform commissions are a significant expense (15-35% of delivery revenue) that should have dedicated tracking
• No VAT-on-commission input tax treatment — the default VAT treatment assumes inputs are standard business expenses, not platform commissions with partial recovery
• No refund tracking — platform refund clawbacks reduce revenue but are not the same as customer refunds you issue directly
• No service fee separation — platforms charge separate service fees (processing fees, marketing opt-ins) that should be tracked separately from commission

Without these codes, your management accounts show total delivery income but not the economics of each platform. More importantly, your VAT return is being built on aggregated data that may not reflect the correct input VAT recovery for platform commissions.

The recommended restaurant COA structure for UK delivery platforms

Here is a working structure that handles the core delivery reconciliation workflow. Account code numbers are suggestions — match them to your Xero organisation's existing numbering pattern. This structure assumes a single-brand, single-location restaurant; multi-brand and multi-location operators add dimensions (see below).

Revenue accounts (200-209 range)

Important: Delivery platform sales accounts should record gross order value — what the customer paid for food — not what the platform deposited into your bank account. The deductions (commission, VAT on commission, refunds, fees) come out on the expense side. This matters for HMRC: your reported sales should match the gross order value platforms report to HMRC under the Digital Platform Reporting Rules, not the net deposit.

Platform commission expenses (300-309 range)

VAT treatment note: Platform commissions and service fees are standard-rated for VAT, and you recover that input VAT in full — including where you sell both standard-rated (hot food) and zero-rated (cold sandwiches, some drinks) items. Zero-rated supplies are taxable supplies taxed at 0%, not exempt supplies, so they do not restrict recovery (VAT Notice 700). Partial exemption requires genuinely exempt supplies, which a restaurant does not make. What the menu mix does drive is the split of your sales codes by rate. Our VAT on Delivery Commissions Guide covers it. Refund treatment: Refund clawbacks are contra-revenue — they reduce your gross sales, they are not an expense you paid. The correct treatment is to record them as a negative sale against the relevant platform's sales code, or to use a dedicated contra-revenue code as shown above. They do not attract VAT recovery because the original sale VAT is being reversed.

Bank and clearing accounts (010-019 range)

Clearing accounts are optional but recommended for restaurants with significant delivery volume. Each platform has a payout lag (orders fulfilled on Monday may not deposit until the following Friday). A clearing account lets you recognise the revenue when earned (for accrual accounting) and separately track when it arrives in the bank — giving you a running balance of what platforms owe you. Our guide on delivery platform payout schedules covers the payout timing in detail.

Tracking categories (for multi-location and multi-brand)

If your restaurant runs multiple locations or multiple brands, do not create separate account codes per location — use Xero's tracking categories feature instead. Tracking categories let you tag each transaction with a location, brand, or segment without multiplying the COA.

For a multi-brand ghost kitchen, create a tracking category called "Brand" with values for each brand. For a multi-location chain, create a category called "Location". You can tag both sales and commission entries, giving you per-location or per-brand P&L views without creating dozens of separate account codes.

The exception is ghost kitchens running multi-brand on multi-platforms — the volume of tagging can become unwieldy, and some operators prefer per-brand account codes for clearer audit trails. Our guide to ghost kitchen reconciliation covers when to use tracking categories versus dedicated codes.

How VAT returns work with this structure

With the COA structure above, your quarterly VAT return reflects:

Output VAT (boxes 1 and 2 on VAT return):

• Gross delivery sales split by rate — standard-rated lines at 20%, zero-rated lines at 0% (a single weighted rate is a shortcut, not the return)
• Plus direct dine-in and takeaway sales at their respective VAT rates

Input VAT (box 4 on VAT return):

• Commission VAT in full
• Plus service fees VAT in full
• Plus standard input VAT on other business expenses

Net VAT payable (box 5): The difference between output and input VAT.

The error-prone part is the output side: getting the standard/zero-rated split right on gross delivery sales. The input side needs no apportionment at all, because a restaurant makes no exempt supplies and so falls outside the partial exemption regime entirely — which also means the de minimis test is not in play.

How HMRC Digital Platform Reporting cross-references your COA

Since January 2024, platforms report seller-level revenue directly to HMRC under the Digital Platform Reporting Rules. When HMRC cross-references your VAT and corporation tax returns against platform reports, they are checking:

1. Reported sales match platform-reported revenue — your Sales — Deliveroo, Sales — Uber Eats, and Sales — Just Eat codes should sum to what platforms reported for the period. The COA structure above makes this trivial to verify.

1. Commission costs are plausible — HMRC knows approximate commission rates for each platform. If your Commission — Deliveroo is 5% of your Sales — Deliveroo, that is a flag (too low); if it is 40%, that is also a flag (too high). The 15-35% range is the expected band.

1. Input VAT recovery is correct — HMRC will spot-check whether you are recovering 100% of commission VAT when your sales mix is clearly not 100% standard-rated. This is the most common error and the easiest for HMRC to detect programmatically.

Our HMRC Digital Platform Reporting Rules guide covers the cross-reference mechanics and what to expect if HMRC queries your return.

Setting up the COA in Xero: step by step

Xero makes adding accounts straightforward. From your Xero organisation:

1. Go to Accounting → Advanced → Chart of accounts
2. Click Add account
3. Choose account type (Revenue, Direct costs, Expenses, or Current asset/liability depending on the code)
4. Enter the code and name from the table above
5. Set the tax rate (Standard 20% or Zero Rated as applicable)
6. Save

Repeat for each account. For a three-platform UK restaurant, you will add roughly 9-12 new accounts. The whole setup takes 20-30 minutes. Test the setup: After adding accounts, enter a dummy journal for one week's Deliveroo payout. Verify that the VAT calculation is correct on the commission line and that the net deposit matches your bank statement. Our commission calculator gives you the exact figures to enter, and the payout reconciliation checker will confirm the journal actually ties to the deposit. Document the structure: Write a short internal note describing which code is used for what, and when. This helps when a new bookkeeper or accountant joins, and reduces the chance of miscoding under time pressure.

Common COA mistakes to avoid

Recording net deposits as sales

The most common error: recording the bank deposit from Deliveroo as "Sales — Deliveroo" of that net amount. This understates your sales (by the commission), understates your input VAT (you lose the commission VAT recovery), and mismatches what HMRC knows platforms reported. Always record gross sales; deductions go on the expense side.

Using a single "Delivery Income" code

Lumping Deliveroo, Uber Eats, and Just Eat into one code hides platform profitability. You cannot see which platform is margin-accretive and which is not — important when platforms adjust commission rates or when you consider leaving one platform.

Missing the VAT-on-commission recovery

Not posting the commission VAT as a recoverable input — either treating it as a flat expense or missing it entirely — leaves money on the table. Across a year, the recoverable commission VAT on a typical delivery-heavy restaurant is £1,500-4,000.

Restricting VAT recovery because sales are mixed

Recovering only a proportion of the commission VAT because your menu includes zero-rated items under-reclaims. Zero-rated supplies are taxable supplies and do not restrict recovery — recover 100%. Keep the effort on the sales side instead: a mixed-rate menu needs its gross delivery revenue split by rate rather than posted as one blended figure.

Separate codes per location or brand (multi-site operators)

For multi-location or multi-brand operators, creating separate codes per location × platform multiplies your COA unnecessarily. Use tracking categories instead — the same codes, tagged by location or brand.

When to review the COA

Review your chart of accounts annually, or whenever:

• A new delivery platform is added (add the platform's revenue, commission, service fee, and refund codes)
• A new location or brand is added (add to the tracking category, not new codes)
• Your standard/zero-rated sales ratio shifts by more than 10-15 percentage points (adjust how you split sales across the rate-specific codes, not the codes themselves)
• HMRC issues guidance affecting platform reporting or commission VAT treatment

A well-designed COA lasts years. The underlying accounts rarely need to change — what changes is the allocation rules, the sales-side rate split, and the reporting views built on top.

Next steps

If you want a template to work from, our free UK Restaurant Delivery Chart of Accounts template is a CSV you can adapt into Xero or QuickBooks — delivery sales split by platform, commission and commission VAT on their own lines, with the VAT treatment noted against every account in plain English rather than software tax codes, so you will map codes manually rather than importing it directly.

Once your chart of accounts is set up, the next step is configuring the rest of Xero for delivery-platform accounting — tracking categories, bank rules, journal templates, and bank feed reconciliation. See our step-by-step Xero setup guide for restaurant delivery for the complete configuration walkthrough.

If you want to audit your existing delivery platform reconciliation before setting up a new COA structure, our HMRC Readiness Checker gives you a quick compliance score with specific actions to close any gaps.

---

This guide covers UK restaurant chart of accounts setup for delivery platforms as of 2026. It is not financial or tax advice. For guidance on your specific Xero organisation and VAT treatment, consult a qualified accountant familiar with UK hospitality.

Sources

• Xero Central — Chart of accounts (UK)
• Xero Central — Tracking categories
• HMRC VAT guide (Notice 700) — input tax you can reclaim
• VAT Notice 706: partial exemption
• Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023
• HMRC VAT rates