The leading accountants in Leeds for restaurants, cafes, and takeaways

Recent figures from the Office for National Statistics suggest that wage growth in the UK is beginning to ease. Between September and November, average pay growth slowed to 4.5%, with private sector wage increases falling to their lowest rate in five years. At the same time, the number of people on company payrolls dropped by 135,000, with retail and hospitality seeing some of the sharpest declines. On the surface, this might sound like dry economic data. But beneath the headlines, there are some very real implications for restaurant and café owners. A slowdown that feels counterintuitive For many hospitality employers, particularly those who have struggled to recruit and retain staff over the past few years, the idea that slower wage growth could be “good news” feels odd. After all, rising wages usually mean happier teams and lower turnover. But from a wider economic perspective, slower wage growth reduces pressure on inflation. When wages rise quickly, people tend to spend more, pushing prices up. That is one of the reasons the Bank of England has kept interest rates high. With wage growth easing and inflation falling slightly, economists believe this increases the likelihood of interest rate cuts later this year. That matters for hospitality businesses because interest rates affect borrowing costs, cash flow, and confidence. Why hospitality businesses are feeling the pinch The data highlights a particularly difficult period for hospitality. Payroll numbers fell despite the economy heading into the key Christmas trading season, when pubs, cafés, and restaurants would normally expect to hire more staff. For many operators, this reflects ongoing pressure from rising food costs, energy prices, rent, and customer spending patterns. Rather than a sign of panic, it points to a period where many hospitality businesses are focusing on survival, efficiency, and protecting margins. What hospitality business owners should take from this For restaurant and café owners, this data is not something to worry about, but it is something to be aware of. A few practical points to consider: Wage planning needs to be realistic. Across-the-board pay rises may not be sustainable. Any increases should be carefully balanced against turnover, margins, and future trading expectations. Cash flow matters more than ever. Hospitality is cash-intensive, and small changes in payroll costs can have a big impact. Staffing decisions deserve scrutiny. Hiring an extra team member is a long-term commitment, not just a short-term fix for busy periods. Interest rate changes could help later. While rates may hold in the short term, easing borrowing costs could bring some relief over time. Clear communication helps retain staff. Being open about pay, hours, and business pressures can go a long way in maintaining trust. A reminder about context Economic headlines rarely tell the full story on their own. Slowing wage growth does not mean wages are falling, nor does it mean hospitality businesses should stop investing in their teams. What it does mean is that the post-pandemic surge in costs and pay is beginning to level out, and many businesses are entering a more cautious phase. Understanding that context helps owners make measured decisions rather than reacting to headlines alone. How we can help At MSF Associates, we specialise in supporting restaurants, cafés, and food businesses. We understand the pressures of managing staff costs, cash flow, and compliance in a challenging trading environment. If you would like help reviewing your payroll costs or planning pay increases, we are always happy to talk things through. You can call us on 0113 240 4100 or book a call with our team . Restaurants, cafes, and takeaways can benefit greatly from working with a specialist accountant. If you hadn’t noticed already, we are specialist accountants in Leeds for food service businesses, so unlike most accountants, we have years of experience working with businesses just like you. If you're interested in finding out more about how we can help your restaurant become more profitable, book a call with one of our accounting experts .

Social media seems, once again, to be ablaze with the famous question: How many r’s are in strawberry? It is one of those prompts that reliably resurfaces every few months, usually accompanied by screenshots of ChatGPT confidently giving the wrong answer. On the surface, it is a harmless curiosity. A bit of fun. But it also reveals something far more important about how AI works, and where its limitations still sit. It often looks like modern AI can accomplish any task. Want a fun marketing image? Easy. Need a blog post written? Done. Want to use AI to create a romantic song for your wedding anniversary? You’ll have it in seconds. Yet despite how magically the technology seems, AI still falls surprisingly flat when it comes to certain basic tasks. Tasks you would expect a seven-year-old to achieve with ease. It is amusing, and slightly baffling, to see ChatGPT struggle with something as simple as counting letters in a word. But it is not just ChatGPT being glitchy or careless. There are structural reasons why large language models struggle with certain words more than others. Take the question itself: how many r’s are there in the word strawberry? For most people, the answer is immediate. You picture the word, scan it, and count. Three. For ChatGPT, the process is completely different. It does not “see” words as letters in sequence. It predicts likely outputs based on patterns it has learned from enormous volumes of text. When asked, what answer does it give? Just a clear and confident: “two.” So, for all the billions in investment, the vast computing power, the pressure on global energy and water resources, and the near-mythical reputation AI now carries, it still cannot reliably answer how many r’s are in strawberry. That should give anyone pause before using AI for things that really matter. Why this matters for tax, finance, and professional advice The strawberry example is trivial, but the underlying issue is not. AI systems are designed to produce plausible responses, not guaranteed correct ones. When they get things wrong, they often do so with complete confidence. That is a dangerous combination in areas like tax, accounting, and compliance. With self-assessment deadlines approaching, it is tempting for restaurant and café owners to ask AI questions such as: Can I claim this expense? Do I need to register for VAT? How should I structure drawings, dividends, or salaries to be more tax-efficient? AI can produce an answer quickly, and it will often sound reasonable. The problem is that it may be outdated, oversimplified, or simply incorrect for your specific circumstances. UK tax law is nuanced, highly contextual, and frequently updated. This is especially true in hospitality, where VAT, staff costs, tips, and allowances can quickly become complex. AI does not understand your full financial picture unless you give it every detail, and even then, it cannot apply professional judgement in the way a qualified adviser can. The same risk applies when using AI for business communications or advice. Using AI to draft responses, explanations, or documents without proper review can introduce subtle errors. A missed exception, a misquoted threshold, or an outdated allowance can all undermine trust and potentially create liability. Using AI safely and sensibly in practice AI is not useless. Far from it. But it needs to be used with care and clear boundaries. Here are a few practical guidelines help reduce risk: Treat AI as a starting point, not a final answer. It can help you think, outline, or draft, but it should never be the last word on technical matters. Always verify facts against authoritative sources, such as HMRC guidance, legislation, or professional manuals. Do not rely on AI for personalised tax advice. Review all client-facing content thoroughly. If you would not sign your name under it without checking, it should not go out unchecked just because AI wrote it. Be especially cautious with deadlines, thresholds, and eligibility criteria. These are areas where AI errors are common and costly. AI can save time, spark ideas, and help with structure and clarity. What it cannot do, at least not yet, is replace professional judgement, accountability, or detailed technical understanding. If it can confidently miscount the letters in strawberry, it can just as confidently misstate a tax rule. The difference is that one is a joke on social media, and the other can have real financial consequences. How we can help At MSF Associates, we support restaurants, cafés and food businesses with clear, practical advice you can rely on. We understand that tools like AI can be useful, but when it comes to tax, compliance, and financial decisions, having a trusted human adviser still matters. If you would like a second opinion on a tax question, reassurance that you are doing the right thing, or help navigating the financial side of running a hospitality business, we are always happy to talk things through. You can call us on 0113 240 4100 or book a call with our team . Restaurants, cafes, and takeaways can benefit greatly from working with a specialist accountant. If you hadn’t noticed already, we are specialist accountants in Leeds for food service businesses, so unlike most accountants, we have years of experience working with businesses just like you. If you're interested in finding out more about how we can help your restaurant become more profitable, book a call with one of our accounting experts .