Creating a home bakery business

[Ash Scott]

Hi all,

My missus would like to start a business from home, where she can take online orders for cakes, sweets, stuff like that, then post them, or have them collected. What legalities are there? I'm guessing she'd need to register as self employed, etc, but what about accounting, health and safety, hygiene, as she'll be doing this from home in her spare time.

Thanks in advance - any more info let needed, let me know

Cheers,
Ash

 

[billie1]

She needs to get her premises inspected by Environmental Health. She can first contact her local council who will provide her with the appropriate advice. The will let her know what needs to be done to bring the kitchen up to standard.

 

[peggyprice]

She also needs to talk to trading standards about the rules for labelling etc. In my experience they are very helpful but there are some very specific rules about listing ingredients, allergens etc that she's best getting her head round before she starts.

If it's a small business, part time from home, keep the bookkeeping simple but accurate, and as you say, register with HMRC as self employed. If she's buying equipment it may be worth registering for VAT (check out whether her products are zero rated first; some food/confectionary products are, others aren't). If they're zero rated she'll be able to get the benefits of claiming VAT back without having to include VAT in her prices, and again, for a small business with simple bookkeeping the VAT returns are a doddle.

And get public liability insurance. It doesn't have to be expensive (Google a price comparison for small business insurance), but it's worth the peace of mind if you're selling food. And it's essential if she wants to do farmers' markets/food fairs etc.

 

[peggyprice]

If your looking at selling made food from home, the council will have to come and inspect your premises to make sure its all hygienic etc

Depends on the product & the attitude of your environmental health team. I ran a business from home for several years selling home made Christmas cakes/Christmas puddings/jams etc and also vegetarian ready meals, and they never came to inspect me (they were fully aware of the business) - they felt that it was a low risk business in terms of health risk. If I'd been selling cream cakes or products made with meat it would have been a different matter, and some EH teams have a different attitude.

instead of registering for self employed I would register as an limited company, alot more benefits and tax relief

Far too much hassle & cost attached to being limited in the early stages of a small business like this. The benefits only come when you have a high enough turnover & profit margin to make it worth the additional accountancy fees.

 

[Nuno]

Well said on both points Peggyprice.

 

[Paul Baldwin]

As peggyprice says you need to consider Public / Products Liability Insurance
Also make sure that your house insurers are aware of what you are doing