How to start a home bakery in the UK: council registration, hygiene rating, HMRC and your first month

To start a home bakery in the UK, register your food business with your local council, free, at least 28 days before you start trading. The council will inspect your kitchen and give you a food hygiene rating from 0 to 5, which is published. Before that visit you need a written HACCP-based food safety system (most home bakers use the free Safer Food Better Business pack), allergen information for all 14 regulated allergens, and full ingredient labels on anything you wrap before it is ordered. A Level 2 food hygiene certificate is recommended, not legally required. Once your trading income goes over £1,000 in a tax year, register with HMRC for Self Assessment by 5 October after that tax year ends. VAT only starts at £90,000.

What registration is called in each UK nation is in home baking laws by state and country, and the questions to ask your council are in do I need a license to sell cakes from home. Councils apply the rules differently, so check with your local authority's environmental health team before you rely on any step here.

Step 1: write your menu and decide how you will sell

Write down every product you plan to sell, with fillings and finishes, and how each one reaches the customer:

• Made to order (a birthday cake baked for a named customer): needs allergen information available, not a full label.
• Prepacked for direct sale (PPDS) (cookies bagged in the morning for a market stall, loaves wrapped before they are ordered): needs a full label.
• Sold online or by phone and posted or delivered: allergen information must be available before the customer buys and when the food arrives.

Fresh cream, custard and cheesecake are not banned in UK home kitchens the way they are under many US and Australian rules, but they bring tighter temperature control and the inspector will ask how you manage it.

Step 2: get permission at home

The Food Standards Agency's guidance says home food businesses follow the same rules as commercial premises, and that you need permission from your mortgage provider or landlord. Check your tenancy, your mortgage terms and, if you own a leasehold flat, the lease. Some councils also want planning permission if customers will collect from your door regularly; ask when you register.

Step 3: register with your council (free, 28 days before trading)

Register online through the food business registration service at least 28 days before you trade. Registration is free and cannot be refused. If you are already selling, register as soon as possible: registration is a legal requirement. In Scotland the same 28-day rule applies through your local authority's environmental health service.

Registration is not approval. It tells the council you exist, and it puts you on the inspection list. Higher-risk businesses are seen first, so a home baker making shelf-stable cakes may wait several months for a first visit. You can trade while you wait.

Step 4: set up your food safety system

The law requires a food safety management system based on HACCP principles. For a home bakery that does not mean a consultant. The FSA's Safer Food Better Business (SFBB) pack is free, written for small caterers and retailers, and covers cross-contamination, cleaning, chilling, cooking and management, plus a daily diary. Fill in the sections that match what you do, and keep the diary going from your first bake, because the inspector will ask to see it.

Step 5: prepare for the inspection and your hygiene rating

The rating covers three things: how hygienically you handle food, the condition of the kitchen, and how you manage food safety (your SFBB pack and records). The FSA says every business should be able to reach a 5. In a home kitchen, inspectors commonly look for:

• hand washing facilities with hot water, soap and paper towels, available during food prep
• ingredients for the business stored apart from family food
• pets kept out of the kitchen while you work
• a fridge thermometer and a written record of readings
• cleaning products suitable for food areas, used in the right order
• allergen information for every product

Your rating is published online and customers do look it up. A 5 is worth the preparation.

Step 6: food hygiene training

It is not compulsory to hold a food hygiene certificate. The FSA recommends a qualification, and it is the fastest way to show an inspector you understand the rules. Level 2 Food Hygiene and Safety for Catering or Retail is the course most home bakers take; it is offered online by many providers accredited through bodies such as the Chartered Institute of Environmental Health. Keep the certificate with your SFBB pack.

Step 7: allergens and Natasha's Law

The 14 allergens you must declare are celery, cereals containing gluten, crustaceans, eggs, fish, lupin, milk, molluscs, mustard, peanuts, sesame, soybeans, sulphur dioxide and sulphites (over 10 parts per million) and tree nuts. Flour, butter, eggs and milk mean almost every bake you sell carries at least three.

Since 1 October 2021, PPDS food in England, Wales and Northern Ireland needs a label with:

1. the name of the food
2. a full ingredients list in descending order of weight
3. the 14 allergens emphasised in that list, in bold, capitals, a contrasting colour or underlined

Scotland sets its own labelling guidance through Food Standards Scotland. Compound ingredients count: if your chocolate chips contain milk and soya, both appear. The most common home baker mistake is labelling "chocolate" without breaking it down.

Step 8: tell HMRC

You can start trading as a sole trader without registering first. Under the trading allowance, the first £1,000 of gross trading income each tax year is tax-free. Once your gross trading income goes over £1,000, you must register for Self Assessment, by 5 October after the end of the tax year you started in (the tax year runs 6 April to 5 April). HMRC then sends your Unique Taxpayer Reference (UTR), which you need to file your return.

When you file, choose either the £1,000 allowance or your actual expenses, not both. A home baker who buys ingredients, boxes and equipment usually claims expenses, so keep every receipt from the first bag of flour.

You can trade under your own name or a trading name. Sole traders do not register a trading name anywhere, but there are rules on what it can include and it cannot copy an existing trade mark.

Step 9: VAT

You must register for VAT if your taxable turnover goes over £90,000 in the last 12 months, or you expect it to in the next 30 days. Most cakes are zero-rated anyway, but not all of them, and catering at events is standard-rated. The full rules are in do I charge VAT on cakes in the UK.

Step 10: insurance

Employers' liability is the only cover below that the law requires, and only once you employ someone. In practice:

• Public and product liability: markets, venues and wedding planners almost always ask for a certificate. Product liability covers a customer who falls ill from what you sold.
• Home insurance: tell your insurer. Business activity at home can void or limit a standard policy.
• Employers' liability: compulsory as soon as you employ someone (with limited exceptions for close family), with cover of at least £5 million. The fine for not having it is up to £2,500 for every day you are uninsured.

Premiums depend on turnover and products, so get two or three quotes.

Step 11: price your first products

Price from your costs: ingredients at what you paid, packaging, your hours at a wage you would accept, then margin. UK worked examples: how much to charge for a cake in the UK, cake pricing calculator, how to price cookies for a cookie business and how to price sourdough bread. Below the VAT threshold your prices carry no VAT; if you expect to cross £90,000, work out now what that does to your standard-rated lines.

Step 12: take orders and deposits

Set your order terms before you post your first price: lead time, deposit, balance date, cancellation and collection or delivery. For custom cakes a 50 percent deposit with the balance 7 to 14 days before the date is the common structure, and what you keep on cancellation should match your real loss under UK consumer law. See how much deposit for a custom cake and the cake order terms template.

Your first-month checklist

Where ibakepro fits

ibakepro is bakery management software for UK bakers, from a first home kitchen to bakeries with staff, wholesale accounts and more than one site. The 14 allergens roll up from each ingredient to every product, so the allergen matrix an environmental health officer asks for updates itself when a supplier changes a recipe, and Growth and Business keep the temperature, cleaning and corrective action records that sit alongside Safer Food Better Business. Deposits and balances are taken in pounds, UK accounts keep their data in London, and VAT can be switched on if you ever reach the threshold. Essentials is £13 a month, Growth £17 and Business £47, with a 14-day free trial. See allergen management, Compliance and payment schedules and deposits.