A £42 order goes out on a Friday. Two mains, a side, two desserts and a soft drink. The platform pays you the best part of a fortnight later, and the remittance shows £42 less commission at 30%, so £29.40. You were happy with that when you signed up, because you compared 30% to your food cost of 28% and it looked like you were still ahead.
You are not, because £7 of that £42 was never yours. It was VAT.
The commission is charged on a number that includes the tax
If you are VAT registered, the menu price your customer pays is VAT inclusive. On a £42 order at the standard rate of 20%, the VAT element is £7, calculated as one sixth of the gross. Your net sale is £35.
The platform's commission is typically charged on the gross order value, not on the net. So 30% of £42 is £12.60, and it is deducted before you see anything. You then account to HMRC for £7 of output tax on the sale, because in the ordinary arrangement the restaurant is the principal making the supply of food to the customer, and the platform is an intermediary supplying you a service.
Run the whole line. £42 gross in. £7 to HMRC. £12.60 to the platform, on which there is VAT you can reclaim, assuming they charge it and issue a proper invoice, so call the net commission cost £10.50. That leaves you £24.50 of net revenue on a sale you would have booked at £35 in the dining room.
Effective deduction against your net sale: 30% of £35 is £10.50, which is exactly what it cost. So the honest way to describe a 30% headline is that it takes 30% of your net revenue, once VAT is handled properly on both sides. The trap is not the arithmetic, it is comparing 30% of the gross against a food cost percentage calculated on the net, which is two different denominators and flatters the channel by about a fifth.
Headline rates move, and they vary by whether the platform delivers or you do. Order-only arrangements where your own driver delivers are materially cheaper than full delivery. Whatever you are quoted, get it in writing whether it applies to gross or net, and whether it applies to the delivery fee and any service fee as well.
Then subtract packaging, which nobody costs properly
A dining room plate costs you the food and the washing up. A delivery order costs you the food, a container, a lid, a bag, a label, cutlery if you send it, a sauce pot, and a napkin.
Sixty pence to a pound and a half per order is a realistic range for decent packaging, and it is higher if you have chosen containers that keep food in acceptable condition. On a £42 order that is not fatal. On a £12 single burger order it is most of your remaining margin.
Two regulatory points sit on top. Since 1 October 2023 in England there has been a ban on supplying certain single-use plastic items, including plates, bowls, trays, cutlery and expanded polystyrene food and drink containers, with parallel measures in the other nations. And Plastic Packaging Tax has applied since 1 April 2022 to businesses that manufacture or import ten tonnes or more of plastic packaging a year, which most restaurants do not, but which is priced into what your supplier charges you.
Some dishes should not be on the delivery menu at all
Food that is good in a dining room and bad in a box is a slow reputational tax. The list is predictable and most operators know it and put the dishes on anyway because they are the popular ones.
Anything fried and thin dies in fifteen minutes under a lid. Anything with a sauce that should sit under a protein arrives with the protein sitting in it. Anything assembled to be crisp against soft becomes uniformly damp. Anything served on a temperature contrast loses the contrast.
The productive move is a separate delivery menu rather than the same menu in a box. Dishes that travel, portioned for a container rather than a plate, priced for the channel, with components packed separately where it matters. That also lets you deal with the pricing question honestly. Many operators price delivery menus above dining room prices to recover the commission. Whether you can is partly a commercial judgement about your customers and partly a matter of what your platform agreement permits on pricing, so read that clause before you build the menu.
Volume has a hidden cost too. A kitchen running at capacity that takes delivery orders is not adding revenue, it is displacing dining room covers that were worth more per ticket. Delivery is most valuable in the hours you are quiet, which is why the right first question is not what does it cost, but what does it fill.
Your own ordering is cheaper and it is not free
The obvious answer to a 30% commission is to take orders yourself. A white-label ordering system on your own website costs a monthly fee plus card processing, and card processing on a small online transaction is somewhere in the region of 1.5% plus a fixed pence charge, depending on your provider and the card. Against 30%, that is an enormous saving per order.
What you buy from the platform, and what you have to replace, is demand. The platform's app is where the customer already is on a wet Tuesday. Your website is not, unless you give people a reason and a route.
Businesses that make the switch work do three things. They capture the customer relationship at the point of delivery, with something in the bag that makes ordering direct next time easy. They build a list, with consent, which under UK GDPR and the Privacy and Electronic Communications Regulations means being clear what people are signing up for. And they accept that the platform still has a role for discovery, so they run both, use the platform for new customers and their own channel for repeat ones, and measure the two separately.
The mistake is to treat it as a binary. Most kitchens that are honest about their numbers end up with a mix, a shorter delivery menu, and a clear view of which hours the channel is actually earning its commission in.
Where this shows up in the game
Takeaways and restaurants are part of Business Baron's full game, and a café is free to run. VAT is calculated to the penny for the year you are in, and gross margin is the number worth watching, so a channel that takes its share of the gross shows up where it hurts. A dish that makes money in the dining room does not automatically make money in a box.