Paper 2 · the arithmetic · published 15/10/2026
The Boundary.
Every restaurant owner in London has heard the arithmetic. From the same ten pounds a customer spends, the cold-takeaway counter keeps all ten and the restaurant keeps eight pounds thirty-three. The arithmetic is correct. It also describes no business you could walk into.
Why this one matters.
The practical one. If you run a food business, this is the paper to read: four decision trees, three worked examples, and a list of questions worth bringing to your own accountant. It lands a fortnight before the Budget on 28 October, when the VAT boundary is perennially rumoured to be in play.
Two of the findings.
The boundary is real money, and almost always described wrongly
£10.00 against £8.33 is the theoretical maximum: the gap between a business selling nothing but cold zero-rated food and one selling nothing but standard-rated catering. Neither exists at scale.
Real counter businesses sit much nearer the restaurant
Modelled across their audited revenue, the four largest counter operators in the country keep between £8.55 and £8.82 of every £10 of consumer spending. The gap between folklore and arithmetic is roughly threefold.
The paper carries 5 findings in all, with the method, the sources and every correction made before publication. It also carries four decision trees, three worked examples, the delivery arithmetic, and a list of questions worth putting to your own accountant.
Read it.
The whole paper is on this site, free and ungated. If you would rather have the typeset PDF, we will email it to you.
Roseworth Research is the research arm of Roseworth Limited, a Finchley accountancy practice. We act for businesses in this sector and have a commercial interest in the subject. The study uses public data only and no client information of any kind.