Put the same pint into two GP calculators and you'll get two different answers. Ask your stocktaker and you'll get a third. Licensee groups are full of the same complaint: the same figures run through a free online calculator and then through ChatGPT, and the answers come back points apart. Nothing is broken. They were answering different questions. There are three common ways of working out GP% and one of them is right for a UK pub. This is how to read the report, which number is which, and what to check when they disagree.
The formula that matters
Gross profit percentage for a wet trade is your ex-VAT selling price minus your cost price, divided by the ex-VAT selling price. Nothing else. Cost prices from your supplier are already ex-VAT. Your till takings are not, because the customer pays VAT at 20% and you hand that straight to HMRC. It was never your money, so it can't be part of your margin.
That one fact explains most GP arguments in the trade. If a calculator lets you type in the price on the till and doesn't ask about VAT, it's computing your margin on money that isn't yours, and the answer comes out flattering and wrong.
The same pint, four answers
Take a pint of lager at £5.34 on the till, the UK average in the Morning Advertiser's May 2026 survey. Ex VAT that's £4.45. Say the keg cost you £137 for a 50 litre, which is 88 pints on paper, so £1.56 a pint. Here's what different methods do with exactly those figures.
| How it's worked out | The sum | The answer |
|---|---|---|
| Trade GP%, ex VAT | (£4.45 − £1.56) ÷ £4.45 | 64.9% |
| GP% on inc-VAT sales | (£5.34 − £1.56) ÷ £5.34 | 70.8% |
| Markup on cost | £2.89 ÷ £1.56 | 185% |
| Achieved GP after real yield, 84 pints sold of 88 | (£4.45 − £1.63) ÷ £4.45 | 63.4% |
Four numbers, one pint, nobody lying. The first row is the one your stocktaker and your pubco both mean when they say GP. The second is what a free calculator gives you when it never asked about VAT, and it's nearly six points too kind. The third is markup, a different measure entirely, and the reason someone in a Facebook group will confidently tell you their GP is 185%. The fourth row is the one that actually lands in your bank, and it's the whole reason stocktakes exist.
Trap one: the VAT basis
Every serious stock report works ex VAT. If you're comparing your report against a target you worked out yourself, make sure your own sum was ex VAT too, or you'll spend a week hunting a six-point loss that never existed. The quick check: divide your till price by 1.2 before you do anything else with it. I've written up net vs gross on the stocktake report and ex-VAT vs inc-VAT stock values separately, because the same trap catches people on valuation too.
Trap two: margin is not markup
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. Same pint, 64.9% margin, 185% markup. Suppliers and wholesalers often talk markup because it sounds generous, and food costing guides drift between the two without warning you. If a number is over 100%, it's markup. GP% can never reach 100 unless the stock was free.
Trap three: theoretical vs achieved
This is the gap that matters most and it's the one the calculators can't see.
Your theoretical GP is what the price list promises: every pint in the keg sold at full price with nothing lost. The 88-pint keg doesn't sell 88 pints in a real cellar. Line cleaning takes a few. Fobbing and the unpullable last inch of the keg take the rest. Sell an honest 84 and your cost per pint sold is £1.63, not £1.56, and your best possible GP just fell to 63.4% before anything went wrong.
Your achieved GP is what the stocktake actually finds: the stock you really used, at cost, against the money that really went through the till. The distance between theoretical and achieved is your loss, all of it, in one number. A point and a half on this pint is about £17.80 of ex-VAT retail per keg. Across a wet-led bar doing thirty kegs a month, that gap is real money, which is why I'd rather know it weekly than discover it at the audit. What's a normal wastage figure covers where the honest yield line sits.
Reading the report itself, line by line
Whoever produces your report, the bones are the same. Opening stock plus purchases minus closing stock is your consumption at cost. That consumption priced at your selling prices, ex VAT, is your expected revenue. Expected revenue against actual till takings gives the surplus or deficit, usually shown in pounds and as a percentage of revenue.
Three things to check before you react to any of it. First, allowances: a proper report deducts logged wastage, line cleaning and promotions before calling anything a deficit, so if your allowances line is zero and you cleaned lines four times that period, the deficit is partly paperwork. Second, price changes mid-period: if the report used old selling prices after a price rise, expected revenue is understated and you'll look better than you are. Third, the yield assumptions: a report that assumes 88 sellable pints per keg will show a permanent phantom deficit that no amount of cellar discipline can close. What variance is acceptable has the thresholds I use before losing sleep.
When the till and the report still disagree
Work the checks in order of cheapness. VAT basis first, it takes ten seconds. Then allowances and yield, ten minutes with the wastage log. Then the till itself, because wrong till buttons create variance out of thin air, and prepaid pints and timing differences do the rest. I've put the full checklist in till not matching the stocktake. Theft is the last explanation, not the first, and in my experience it's the right one far less often than the paperwork is.
What should the number actually be?
Depends what you sell and what you pay, and tied pubs start several points behind free-of-tie on cost price alone. I keep the benchmark figures in a separate guide, pub GP% benchmarks, rather than repeating them here, but the short version is that the band matters less than the trend. A pub that holds a steady 62 with clean paperwork is in better shape than one that claims 68 and can't explain how.
One habit fixes most of this: work out your GP the same way every time, ex VAT, achieved, with allowances logged. StockTap stores every selling price ex VAT and does the achieved sum on every count, which is exactly because I got sick of three numbers claiming to be the same thing. The full GP calculation guide walks through the arithmetic by hand if you'd rather own the sum yourself.
Sources
- HMRC, VAT rates — standard rate 20% on alcohol sold in pubs.
- Morning Advertiser pint price survey, 21 May 2026 — UK average pint £5.34.
- Worked examples and yield arithmetic are the author's own. The £137 keg is illustrative; substitute your invoice price.