Do I charge VAT on cakes in the UK?
Usually not. HMRC's VAT Notice 701/14 says most traditional bakery products, "such as bread, biscuits and cakes, are zero-rated", and it names "commemorative cakes such as a wedding, anniversary or birthday cakes" in the zero-rated column. A VAT-registered cake maker charges 0 percent VAT on a cake sold to take away or delivered. The cake becomes standard-rated at 20 percent when it is supplied in the course of catering, or eaten on your premises.
If you are not VAT registered, you charge no VAT on anything.
When you have to register
You must register if either is true:
- your total taxable turnover for the last 12 months goes over £90,000
- you expect it to go over £90,000 in the next 30 days on its own
Zero-rated sales count. GOV.UK defines taxable turnover as everything you sell that is not VAT exempt or out of scope, and lists zero-rated goods as part of it, so a cake business reaches the threshold on its full takings even though it would charge 0 percent on almost all of them.
Two options follow from that, and both are worth taking to an accountant with your own figures:
- Exemption from registration. If most of what you sell is zero-rated, you can ask HMRC for permission not to register.
- Voluntary registration. Below £90,000 you can choose to register. A seller of mostly zero-rated cakes then charges little VAT but can reclaim VAT on the items it buys from its registration date.
Zero-rated or 20 percent: the lines that matter for bakers
From VAT Notice 701/14, with the catering rules from VAT Notice 709/1:
| Product or situation | VAT rate |
|---|---|
| Celebration, birthday and wedding cakes | Zero-rated |
| Sponges, fruit cakes, meringues, cream gateaux, pastries, eclairs | Zero-rated |
| Flapjacks, millionaire's shortcake | Zero-rated |
| Biscuits with chocolate chips in or pressed into the dough | Zero-rated |
| Biscuits coated with icing or caramel | Zero-rated |
| Biscuits wholly or partly covered in chocolate | Standard (20%) |
| Gingerbread men decorated with chocolate (beyond a couple of dots for eyes) | Standard (20%) |
| Ice cream cakes and gateaux | Standard (20%) |
| Edible cake decorations, sugar flowers | Zero-rated |
| Inedible decorations sold on their own | Standard (20%) |
| Any food supplied in the course of catering | Standard (20%) |
| Food eaten on your premises | Standard (20%) |
Two things in that table catch decorated cookie makers. A plain iced cookie is zero-rated, but a cookie dipped or drizzled in chocolate is a chocolate-covered biscuit and is standard-rated. Price your chocolate-dipped range knowing 20 percent of a registered seller's price goes to HMRC.
Wedding cakes, toppers and catering
A wedding cake on its own is zero-rated. Two details change that:
- Catering. VAT Notice 709/1 lists "third party supplies of catering for events and functions, such as wedding receptions" as catering, and anything supplied under a contract to cater for an event is standard-rated. If you are supplying the dessert service for a wedding rather than selling the couple a cake, expect 20 percent.
- Toppers and keepsakes. Inedible decorations sold with a cake, such as a bride and groom figure, are part of the cake and follow its zero rate. A decoration that is clearly a separate item, such as a toy meant to be kept and played with, is standard-rated on its own.
How a delivery charge is treated is covered in HMRC's VAT Notice 700/24.
Keeping it straight in ibakepro
In ibakepro VAT is one of the tax types you can choose. You set the rate, with a different rate by product category where one needs it, so a zero-rated cake category and a standard-rated chocolate-dipped cookie category can sit side by side, and ibakepro applies what you configured to prices, deposits and balances. For the rest of a UK account, including pounds and the London data region, see bakery software for UK bakers, and for setting the price itself, pricing celebration cakes in the UK.
This is general information drawn from HMRC's published notices, checked October 2026. HMRC and your accountant are the final word on your products.