How to Start a Restaurant in the UK in 2026: A starter for ten

Starting a restaurant in the UK is a big step. Costs vary a lot with size, location, and the type of establishment, so rather than a single headline figure, this article prices the main cost areas individually with a source next to each. Most owners take two to six months to go from securing a site to opening night. It covers some of the key steps to take, the main licences you need, some basic tax concepts, and how to set up your money, and is written for first-time owners who want to open in the next year.

Costs vary by business, so treat the figures here as indicative rather than a complete list. You should always consult a professional adviser for advice tailored to your business's specific needs and circumstances.

Key takeaways

• Costs depend on size, location, and whether you lease or buy, among many other factors. The table below prices the main cost areas individually, each with its source; treat any single number as a rough guide.
• You must register your food business with the local authority where the business is based, normally at least 28 days before you open. Registration is free.
• You will need to choose a business structure (usually, sole trader or limited company), and the right choice depends on your situation.
• A business bank account keeps your takings separate and helps you track cashflow from day one.
• Tax duties depend on your circumstances, including your business structure and turnover. You are required to register for VAT once taxable turnover passes £90,000.

How much does it cost to start a restaurant?

There is no single price tag. The cost depends on your location, the size of the site, the type of food you serve, and whether you lease or buy the premises, among many other factors. A small or quick-service site sits at the lower end. A full-service restaurant in a major city sits much higher.

The table below shows published estimates with a named source next to each figure. These are estimates, not fixed prices, so use them as a starting point.

Each figure is quoted as published by the named source and figures vary by source. Sources use different assumptions, so ranges do not always align with one another. Build your own budget from quotes for your specific setup.

How to start a restaurant: some key steps

Here is the order many owners follow. Each step builds on the last, so working through them in turn keeps the process manageable. This is an overview rather than an exhaustive list, and the details depend on your own plans.

1. Test your idea. Decide on your concept, menu, and target customer. Check what other restaurants nearby offer and where the gaps are.
2. Write a business plan. Set out your costs, expected sales, and how you will fund the first year. This is also what a lender or landlord will want to see.
3. Choose your business structure. For example, whether to trade as a sole trader or set up a limited company. See the section below.
4. Find and secure premises. Check the lease terms and the condition of the kitchen. Also check the site has the right planning use, which is the council's permission for the building to run as a restaurant.
5. Sort your licences and registrations. Register your food business, apply for any alcohol or music licences, and arrange your food hygiene inspection.
6. Set up suppliers and equipment. Line up food suppliers, kitchen equipment, and a till or POS system. A POS (point of sale) system is the till software that takes payments and tracks sales.
7. Hire and train staff. Plan your team and set up payroll. Check that each person has the legal right to work in the UK before they start.
8. Open your doors. Plan a soft launch, a quiet trial opening, to test the kitchen and service before you open fully.

Choosing a business structure

One of your first jobs is to decide how to set up the business. New restaurants tend to pick one of two options: sole trader or limited company.

Sole trader

As a sole trader, you and the business are legally the same entity. It is simple to set up and you keep full control. The catch is that you are responsible for any business debts yourself.

Limited company

A limited company is a separate legal entity from its owners and directors. This can limit your liability if things go wrong. For some owners, it may also help with tax. It brings more paperwork, though. You file accounts and need to make statutory submissions with Companies House each year.

If you decide to form a limited company, you can register it with Companies House yourself, through an accountant, or with Zempler Bank's formation service (which is free if you open an account with them and deposit £100 within 30 days). Registering online with Companies House costs £100.

Each structure comes with different responsibilities and considerations. The decision depends on your specific circumstances. There is no single answer that suits everyone.

For a closer look at the two options for a food business, read our guide to sole trader vs limited companies.

For advice on your specific situation, speak to a qualified accountant, solicitor, or professional adviser.

Licences and registrations you need

A restaurant must meet several legal requirements before it opens. The main ones are below. Check with the local authority where the business is based, as some rules vary by area.

• Food business registration. In most cases, you must register with the local authority where the business is based, usually at least 28 days before you open. There is normally no charge, and registration is not usually refused. Some businesses that handle products of animal origin, such as meat, fish, egg or dairy products, and supply them to other businesses may need approval from the local authority or the Food Standards Agency instead of standard registration. Approval involves an inspection before you can operate, so check the FSA guidance early if this could apply to you.
• Food hygiene rating. After you register, an environmental health officer inspects your premises and gives you a food hygiene rating.
• Premises and alcohol licence. If you plan to serve alcohol, you will usually need a premises licence, and the rules vary across the UK. In England and Wales this normally includes naming a designated premises supervisor to oversee alcohol sales. Check the requirements with your local council.
• Music licence. If you play recorded or live music, you usually need a music licence from PPL PRS, the body that collects music royalties on behalf of music rights holders.

You can register your food business and read the latest guidance on GOV.UK and the Food Standards Agency website.

Licensing rules vary by area and across the UK. Check the requirements with your local council before you open.

Tax and VAT

Your tax duties depend on your circumstances, including your business structure and your turnover, among other factors. Here are some basic concepts to be mindful of.

• Income Tax or Corporation Tax. Sole traders pay Income Tax on their profits through Self Assessment, the system for reporting income to HMRC each year. Limited companies pay Corporation Tax on their profits instead.
• VAT. You are required to register for VAT once your taxable turnover passes £90,000 in any 12-month period. This is a rolling figure, so you check the last 12 months at the end of each month, not just at year end. Check current HMRC thresholds, as they can change. You can also register for VAT voluntarily, even if your taxable turnover is below the registration threshold.
• PAYE. If you employ staff, you run payroll through PAYE (Pay As You Earn). This is how you take tax and National Insurance from wages and pass it to HMRC.

Tax rules depend on your circumstances and can change. Check the latest guidance on GOV.UK and speak to a qualified accountant.

Setting up your business banking

Cashflow is the top worry for most new restaurant owners. A business bank account keeps your takings apart from your personal money. That makes it easier to see what comes in and goes out. It also helps at tax time, when you need a clear record of what you spend.

If you set up a limited company, the company is a separate legal entity and its finances are legally separate from yours. In practice this means keeping its money in a separate business account. Sole traders are not required to have one, though many find it simpler to keep business money apart, and most personal account terms do not allow business use, or place restrictions on it.

Zempler Bank’s business accounts are well suited for hospitality businesses like restaurants, cafes and pubs. You can apply online in minutes. Once your account is open, you can pay suppliers and track your takings in one place, though some features may take longer to set up, and taking card payments needs a separate merchant services provider. You can pay in cash at Post Office branches across the UK, which suits restaurants that take a lot of cash. The account also includes cashflow tracking and a savings pot you can use to set money aside for tax, plus cashback on eligible card spending on our Business Extra and Business Pro accounts, which can add up when you buy stock and equipment.

Eligible deposits are protected by the FSCS up to £120,000 per customer.