Setting Up a Restaurant Chart of Accounts in Xero (UK Delivery Platform Edition)

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. You can recover the input VAT only to the extent your sales are standard-rated. If you sell both standard-rated (hot food) and zero-rated (cold sandwiches, some drinks) items, you need to apply partial exemption. Our VAT on Delivery Commissions Guide covers this calculation. 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 × weighted VAT rate based on standard/zero-rated menu mix
• Plus direct dine-in and takeaway sales at their respective VAT rates

Input VAT (box 4 on VAT return):

• Commission VAT × standard-rated sales ratio (partial exemption)
• Plus service fees VAT × standard-rated sales ratio
• Plus standard input VAT on other business expenses

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

The partial exemption calculation is the most error-prone part. The simplified method (de minimis) may not apply to restaurants with significant delivery revenue — check with your accountant, and see HMRC's VAT partial exemption guidance for the detailed rules.

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. 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.

Applying 100% VAT recovery when sales are mixed

Recovering 100% of commission VAT when your menu includes zero-rated items overclaims input VAT. This is the specific error HMRC's cross-referencing catches.

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 the partial exemption calculation approach, 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 partial exemption calculation, and the reporting views built on top.

Next steps

If you want a template to work from, we are building a UK-specific Restaurant Chart of Accounts XLSX template that you can import directly into Xero. Join the waitlist below to be notified when it is available.

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.

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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 partial exemption guidance
• Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023
• HMRC VAT rates