Pub stock records: legal requirements 2026

Last updated: 26 June 2026

Most pub operators think stock record-keeping is just about catching theft. It isn’t. You’re actually required by law to hold documented evidence of stock movements — and HMRC takes that seriously when an audit lands on your desk. But here’s what most licensees don’t realise: the same records that keep you compliant also reveal where you’re actually losing money, which isn’t usually theft at all.

If you’re running a pub without a clear system for pub stock records legal compliance, you’re not just exposed to a fine — you’re flying blind on your own margins. This guide covers what you must keep, why HMRC demands it, and how a simple disciplined count routine protects both your licence and your bottom line.

What does the law actually require?

You must keep records that show opening stock, all purchases, all sales, and closing stock at intervals no longer than 13 weeks. This is a basic requirement under VAT rules and licensing law. It sounds simple, but the detail matters.

For VAT compliance, HMRC requires businesses to keep records that allow verification of VAT liability. A pub is no exception. Your stock records are your primary defence: they show what came in, what went out, and what should physically be there.

For licensing, your local authority can demand evidence of stock control during inspections. A disorganised approach signals poor operational control and attracts scrutiny. Clean records signal a well-run business.

The key legal detail most operators miss: your records must be made at the time the transaction occurs (or as close to contemporaneous as is practical). A spreadsheet filled in three weeks later claiming to reconcile stock is not contemporaneous — it’s a guess backed by paperwork.

This applies whether you’re tied to a pubco, a free house, or somewhere in between. Brewery ownership doesn’t change your legal obligation to hold and produce records on demand.

HMRC audits and stock records

When HMRC walks in to audit your VAT return, their first move is to look at your stock records. Here’s why: they compare your declared VAT-liable sales against your stock movements to detect undeclared sales or inflated cost of goods.

The audit works like this. They take your opening stock, add your purchases, subtract your closing stock, and that theoretical figure should match your till records of what you sold. If there’s a gap — especially a gap that favours you — they start asking questions. If the gap doesn’t match any documented waste or loss, it becomes taxable income you should have declared.

A poorly kept stock record is worse than no record at all because it raises red flags. A meticulous record, even if it shows some loss, demonstrates you’re actively managing the business and gives HMRC confidence that your VAT declaration is honest.

Here’s a real operator insight: HMRC doesn’t expect you to have zero loss. They know pubs have wastage — spillage, bad lines, evaporation, sampling for quality. What they want to see is that you’re tracking it, that you can explain it, and that it’s reasonable. A 2–3% variance on draught due to line waste is normal and defensible. A 15% variance with no explanation is a problem.

What you must record and keep

Opening and closing stock values

Record the physical count of all stock at the start and end of each 13-week period (or more frequently if you prefer). This is physical stock, not EPOS guesses. You must actually count it or measure it.

For kegs and casks, this means dipping them with a measuring stick or using a dipstick to establish volume. For spirits, this means weighing an open bottle on scales and recording the weight. For packaged goods (bottles, cans), it means counting.

Do not guess. Do not use “last order” records. Physically verify what’s there.

Purchase records and invoices

Keep every invoice from your suppliers — brewery, cash-and-carry, spirits merchant, soft drink supplier. These must show:

• Date of purchase
• Item description and quantity
• Unit cost and total cost
• VAT if applicable
• Supplier name and VAT number (if they’re VAT-registered)

These are your proof of cost of goods. Don’t throw them away. HMRC will ask to see them during an audit.

Till records and sales data

Your till or EPOS system must produce a reconcilable record of what you sold — by category, if possible (draught, spirits, packaged, food). This should tie to your stock movement on the same day or the same week.

If you’re using a basic till with no breakdown, you’ll struggle to explain why your stock variance is high. The more granular your till data, the easier it is to identify whether loss is in draught, spirits, or packaged.

Wastage and loss records

This is critical and most operators skip it. You must document:

• Damaged stock (broken bottles, burst kegs)
• Spillage (date, item, reason if known)
• Line cleaning waste (volume of draught lost during cleaning)
• Evaporation (on cask ale especially)
• Sampling for quality (a legitimate business cost)
• Stock returned to supplier (with credit note)

Without these records, your closing stock variance is unexplained and looks suspicious. With them, you can justify the variance and show HMRC you’re in control.

Duty stamps and excise records

If you hold spirits subject to duty, or beer in casks, keep the duty stamps or cask marks as proof of duty payment. These are part of your audit trail for HMRC and Customs.

Common record-keeping mistakes

Using a spreadsheet with no timestamp

A spreadsheet is fine, but it must be backed by real data — a physical count or measure on a specific date. If your spreadsheet shows “closing stock: 120 kegs” but you didn’t actually count them on that date, that’s not a record. It’s a prediction. And if HMRC asks you to sign a declaration of accuracy, and it’s inaccurate, that’s a compliance failure.

Doing a count once a year

This is a mistake for two reasons. First, legally, you should be doing a count every 13 weeks minimum — once a year is compliant but leaves a nine-month gap where anything could be happening. Second, operationally, a nine-month gap means you don’t know whether your loss started in month one or month eight, which makes it impossible to fix.

A weekly line check is faster than you think. At my own pub, I dip every cask and partial keg, weigh three or four open spirits, check line readings, and reconcile against the till. It takes 45 minutes. I do it the same day every week. After a fortnight of this routine, the weekly variance became a number I could trust — and I could see exactly where loss was creeping in.

Not documenting waste

If your stock variance is 5% but you haven’t documented any waste, HMRC will assume it’s undeclared sales or theft. If your variance is 5% and you’ve documented 4% of that as line cleaning and spillage, it’s a minor difference and defensible.

Mixing supplier invoices with till data without reconciling

You must regularly reconcile what you bought against what your till says you sold. If your invoices show 50 kegs purchased in a month and your till shows you sold 60 kegs’ worth of draught, something’s wrong — either you’re selling from old stock, or the till is wrong, or there’s a gap in your records.

Do this reconciliation weekly or fortnightly. Don’t wait until the end of the year.

How proper records protect you

A proper record-keeping system does three things for you.

It proves compliance

When HMRC audits you, you have documents that show you’ve been doing the job. You’re not scrambling to reconstruct history. You have a contemporaneous trail. This alone reduces audit risk because you look competent.

It reveals real loss

A 1% stock loss on wet sales quietly costs a typical pub £3,000–£5,000 a year. Most operators don’t even know they have it because they’re not measuring. The moment you start recording weekly, you’ll see the loss. Then you can investigate: Is it line cleaning? Overpour? A rogue staff member? Broken stock? Once you know what it is, you can fix it.

Pubs that move from a messy spreadsheet to a disciplined count routine typically claw back 1–2 GP points within a couple of months. At a £500k turnover, that’s £5k–£10k to your bottom line in the first eight weeks.

It protects your licence

Your local authority can challenge your licence if they believe you’re running an uncontrolled business. Proper stock records, even if they show some loss, demonstrate you’re taking your responsibilities seriously. Poor records are a licensing red flag.

Building a system that works

The most effective way to maintain compliant stock records is to do a small, disciplined count on the same day every week using the same method, reconcile it against till data the same day, and document any variance or waste immediately.

You don’t need expensive equipment. You need:

• A dipstick (£5–10) for kegs and casks
• Kitchen scales (£15–30) for open spirit bottles
• A notebook or a simple digital record (pen and paper works, but a spreadsheet or app is easier to archive)
• Access to that day’s till close
• 15 minutes of quiet time to do the count properly

Pick a day — say, Thursday morning before service — and do it then every week without fail. You don’t need fancy software. You need consistency.

That said, if you’re keeping records on a tangle of spreadsheets across multiple devices, or if you’re trying to reconcile till data manually every week, you’re creating friction. The StockTap pub stock app was built by a working pub landlord to solve exactly this: it time-stamps every count, flags variances against the previous week, stores photos of dipstick readings, and links directly to your till data if your EPOS supports it.

You can also use SmartPubTools to track cellar temperature and line readings alongside your stock count, which gives you a complete picture of where loss might be coming from (a warm cellar will cause different variance than a clean line).

The cost of a simple system is negligible compared to the cost of an HMRC audit or a licensing challenge. And the upside is that you’ll find thousands of pounds of margin you didn’t know you were losing.