rjeffery Posted 17 Jan 2013 , 12:27pm
post #1 of

I'm sure this has been asked before so perhaps you could point out a thread but i'm based in the UK and i have been making cakes for family and to take to work for about a year but i have been asked a couple of times if i make cakes as a business. So far i have said no because i already work full time but i am interested to find out if i can do it, in additional to working full time. I would only do a handfull of cake a year (birthdays and weddings) but from what i have read, its still pretty complicated.

 

I know i would need to get a health and hygine certificate and have the local council inspect which would be fine but i've heard that i have to tell the mortgage company i run a business from home and the insurance comp as its a high risk which all seem a bit much for a handfull of cakes i'll make just a couple of hundred pounds on.

 

Is it really worth it? Anyone doing it on such a small scale?

33 replies
BakingIrene Posted 17 Jan 2013 , 12:45pm
post #2 of

How is baking a few cakes a higher risk than simply cooking for yourself?

 

And people routinely do work-related email from home.  Anything risky there? Do THEY report this to their mortgage company?

 

Do your consultations with customers outside of your home. A customer falling on a slippery step or sidewalk is the only risk that the insurance company could care about. Bake according to food regs but don't trouble the others for occasional "hobby" work at home.

 

I expect you would have to disclose ONLY if this was your primary source of income.

rjeffery Posted 17 Jan 2013 , 1:04pm
post #3 of

It does all seem a bit over the top! I read on a lawyers website that the increased use of the oven is why its high risk as there is increased risk of fire but there are only two of us in the house and the additional baking would be no more than a family of 4's baking.

 

The world's gone a bit crazy if you ask me, apparently you can't even give out cakes to work colleagues without being registered with the council, its stopping people being able to enjoy a hobby.

 

I honestly thought the only worry would be telling the tax office and since its such a tiny amount i thought it would be easier enough but i'm thinking now its just not worth it.

Relznik Posted 17 Jan 2013 , 2:14pm
post #4 of

I think it upped our household insurance by about ten quid a year!

 

But you DO need to get registered with your local authority.  And you DO need to let HMRC know - even if you're not making much of a profit.
 

-K8memphis Posted 17 Jan 2013 , 2:57pm
post #5 of
Quote:
Originally Posted by rjeffery 

It does all seem a bit over the top! I read on a lawyers website that the increased use of the oven is why its high risk as there is increased risk of fire but there are only two of us in the house and the additional baking would be no more than a family of 4's baking.

 

The world's gone a bit crazy if you ask me, apparently you can't even give out cakes to work colleagues without being registered with the council, its stopping people being able to enjoy a hobby.

 

I honestly thought the only worry would be telling the tax office and since its such a tiny amount i thought it would be easier enough but i'm thinking now its just not worth it.

 

i perfectly agree with you--could not agree more--it's nuts

jason_kraft Posted 17 Jan 2013 , 3:36pm
post #6 of

AThe increased risk is liability from selling food to strangers. In the US most homeowners insurance policies will not cover home-based business activities, which is why a separate business liability policy (usually $500/year or so) is needed.

practicemakesperfect Posted 17 Jan 2013 , 3:50pm
post #7 of

It IS crazy!  Can't do a thing without registering and getting 5 different permits and whatnot!

LovelyCakes4Us Posted 20 Jan 2013 , 10:22pm
post #8 of

AI agree, its total crap.. I make less then one or two cakes a month..

kikiandkyle Posted 23 Jan 2013 , 1:24am
post #9 of

ANobody's stopping you from baking cakes as a hobby and giving them to friends. The law is about selling them. People think its silly until someone they know gets food poisoning from something that was baked in an unregulated kitchen and then they're livid that they were breaking the law. That's how these laws come about in the first place.

gemmal Posted 23 Jan 2013 , 9:25am

I know what you are saying and I'm sure everyone totally agrees, I think it's just the extent that the laws are enforced. With the UK Government coming down on ebay sellers and who knows who else for selling things in an 'illegal' way (as in if you sell so many things a month/year on ebay you are a business and will be treated as such) it gets very hard to want to do anything. I'm not saying there have been many prosocutions or any but we are told there will be, all scare tactics.

 

I love making cakes and have done a few for friends and family for birthdays and such but by UK law if I was to ask for any compenstation of costs, i.e. 'the ingredients cost me so much so just give me that' and I wasn't making any money from the cakes, its still technically selling and I'm out of pocket. I know the tax man isn't going to start banging on my door just because my dad gave me a tenner for making my little brothers birthday cake but they are saying they can. Also, even if I wanted to, because I rent my home privately, I can't set up a business at home if I wanted to because the landlord's mortgage will be affected. As for food poisoning, I have taken a course of Food saftey and have the certificate etc and even baking cakes for free for family I want to make sure no one gets ill. I'm sure there are some people out there who aren't as aware of it but that's really down to the person, checking ingredients/kitchen/equiptment etc. I know mistakes happen and supermarkets can even sell food that isn't to standard sometimes too.

 

It just seems easy enough to do somethings when your already qualified or set up but getting qualified or set up for yourself is getting harder and harder. Practice makes perfect? yeah well its also insanely expensive.

-K8memphis Posted 23 Jan 2013 , 2:33pm

just a small idea to help the medicine go down

 

if i think of doing cakes as being catering it helps me with the big picture

 

it's the vastly different rules and regulations from area to area about cakes that make it hard/painful to swallow

 

some can do it from home some cannot--intensive degrees of allowances/non-allowance -- not fair but that's the way it is

 

and i don't want my neighbors to run egg farms or mechanic shops on their property either

 

so while it can/does sting

 

because if you bake one cookie you gotta hoard of well intentioned people/ignoramuses chanting "you should open a business you should open a business etc, etc...."

 

y'know fanning the flame that is already been scorching you

 

then you have to explain to them blablablablablablabla "oh sure you can" no you can't (maybe that's a u.s. thing)

 

but it's for those who take the big plunge or are in areas where it's allowed below the 'pay rent/big overhead business level'

 

we can still do a cake or two--that's the real beauty of the thing

 

but it's a very good thing to put that 'sell' thing firmly down, tuck it in, turn off the light and close the door

 

then go design and produce the killerest cake of all !!!! buwahahahaha

kellertur Posted 23 Jan 2013 , 2:53pm

Rules and food laws  are in place for a reason. 

 

SAFETY.   No one wants to make anyone sick, right? 

AZCouture Posted 23 Jan 2013 , 2:55pm
Quote:
Originally Posted by kikiandkyle 

Nobody's stopping you from baking cakes as a hobby and giving them to friends. The law is about selling them. People think its silly until someone they know gets food poisoning from something that was baked in an unregulated kitchen and then they're livid that they were breaking the law. That's how these laws come about in the first place.

And if you get sued and are responsible for hospital bills, and anything having to do with a result of someone getting sick...how on earth will you pay it? It can bankrupt you. Ruin you. Yeah, it *is* unlikely. But it's possible. 

kellertur Posted 23 Jan 2013 , 2:56pm

I don't like Pina Coladas,

 

but I DO like

 

dancing in the Rain.  madhatter.gif

-K8memphis Posted 23 Jan 2013 , 3:37pm

please

 

nobody is poisoning anyone

 

the point here is dreams not disease/sanitation

 

the sky is not falling

 

we all know plenty of fully regulated places that are serving pond scum

 

the fact that if i lived a few miles from here i could work out of my home and i can't from right here is frustrating

 

that's not a hygiene issue it's an unrelenting head f___ icon_biggrin.gif

 

dreams just don't go away just because of your address

 

we are commiserating with each other

 

we're all gonna move just any minute now--i'm heading for ohio--except it's colder than tn--hmmm...

costumeczar Posted 23 Jan 2013 , 3:45pm

You need to have your ducks in a row if you're going to sell cakes or anything else. I know two people right now in the wedding industry here who are being sued by clients for stupid things, but it doesn't matter how crazy, nuts or stupid it is, they're still being sued. Get licensed, get insured, then sell away. There was also an article in the paper this week about some guy in my state who's a guitarist. He'd been playing in bands on and off then started booking more gigs on his own, but of course he didn't get a business license since "I don't make that much money." So the state found out and he got hit with a bunch of fines. If you need to be licensed just get licensed, it isn't that big a deal and it will prevent problems down the line.

jason_kraft Posted 23 Jan 2013 , 3:51pm

A

Original message sent by AZCouture

And if you get sued and are responsible for hospital bills, and anything having to do with a result of someone getting sick...how on earth will you pay it? It can bankrupt you. Ruin you. Yeah, it *is* unlikely. But it's possible. 

The idea behind keeping it to close friends and family is that they presumably won't sue you if there is a problem.

-K8memphis Posted 23 Jan 2013 , 3:51pm

sales and use tax in tennessee even covers items 'severed from the ground'

 

so when i had a tea room--if i grew my own tomatos--i'd have to declare them and pay tax on it

 

detective.gif

 

tennessee loves me some taxes

 

taxessee

 

tenetaxi

 

icon_biggrin.gif

-K8memphis Posted 23 Jan 2013 , 3:53pm

close friends and family--smaller occasions--family weddings

 

friend of a friend--you're a caterer

jason_kraft Posted 23 Jan 2013 , 4:05pm

AAs a seller, sales and use tax should never be out of pocket, just tack it onto the price and remit the tax to the govt.

If you are breaking even or taking a loss you should not owe income tax, since tax is typically only due on net income. In fact if you have a loss you may be able to offset other taxable income.

-K8memphis Posted 23 Jan 2013 , 4:32pm

the point, my friend, is that i can't even grow things to use that are not taxed

 

clever of those tax folks

 

probably true in many areas i don't know

 

i just thought it was bizarre/surreal

 

but not if i was a farmer i guess

 

however i did not grow tomatos i was too busy

 

i grew lots of dirty dishes though

 

icon_biggrin.gif

kellertur Posted 23 Jan 2013 , 4:46pm

I'd sue if someone injured my child from food poisoning due to irresponsibility (or just stupidity), you'd better believe it.   It wouldn't even be about the money, I'd probably give it away just to prove a point.  A friend deserves the same level of food safety as a complete strange who "might" sue.   Did I misunderstand? 

 

How many of us have ever been sick all weekend due to eating out or eating bad food at a party?  Would you go back?  If it's me, I can just not go back...if someone hurts my child the gloves are coming off.

kikiandkyle Posted 23 Jan 2013 , 4:53pm

AFrom the UK perspective, you won't get sued for hospital bills etc, but the culture there is that there are too many laws, until something happens and then someone's head has to roll because there wasn't a law against whatever happened.

I'll use a recent storyline from a popular UK tv show to illustrate - a former contractor fixes a friend's boiler, something that wouldn't seem out of the ordinary, it's just a favor for a friend using skills he's trained in, but not currently licensed in. Except he makes a mistake and the friend ends up in hospital with carbon monoxide poisoning. The family and friends of the victim are ready to have the person doing the repair locked up and the key thrown away, because they've broken the law. But you know they all would have appreciated the same friend doing a free repair for them in a pinch.

jason_kraft Posted 23 Jan 2013 , 5:15pm

A

Original message sent by kikiandkyle

But you know they all would have appreciated the same friend doing a free repair for them in a pinch.

I'm sure they would have appreciated the free repair had it been done correctly. Any time you provide a product or service (paid or not) for someone else you are exposed to liability, which you may be able to protect against with umbrella insurance (personal liability) and business liability insurance if applicable.

This doesn't mean you should never help anyone, just that you should approach each job with the same level of care and professionalism that you would expect from others. If you do things right and there is no negligence on your end you usually won't have anything to worry about.

howsweet Posted 24 Jan 2013 , 7:46am

.

howsweet Posted 24 Jan 2013 , 8:07am

And how these laws come about in the first place is infinitely more complicated than that. It has more to do with special interests tugging back and forth, certain people vying for dominance, lawmakers having to answer to their constituents and in this specific situation, from what I saw at the hearings at the capitol in Austin,  a group of people apparently with just barely the ability to eek out a degree who probably couldn't get a job anywhere but the health department.  Who have more power than they do common sense and  lack the ability to think logically.  The health departments were an embarrassment.  The kinds of cases of food poisoning they were able to find in their battle to save the public from home bakers was, for example, chocolate chip cookie dough from school bake sales. The cottage food bill had nothing to do with selling raw foods with egg in it and in fact strictly prohibited it. The bill was about cooked cake. But the health dept couldn't find any examples of this food poisoning you refer to.
 

emma_123 Posted 24 Jan 2013 , 10:48am

I'm in the UK too and I've found it made a big difference with my house insurance - most companies wouldn't give me a quote as I was baking at home and had people coming to my house to collect cakes so when I did find somewhere that would cover me I'm paying a lot more than I was for just my house insurance (although my liability insurance is included too).  I don't earn enough to pay Tax or NI so that isn't a problem but I do have a business bank account which I have to pay a charge for each month and have to pay to put cash or cheques into my account too.  It does cost more money than just baking for family but if you do want to set up a business you really do need your liability insurance and all the legal bits and pieces in place (like having your kitchen inspected, registering for Tax etc).  I suppose it depends - do you just want to make cakes for your family or do you see yourself doing this on a more part/full-time basis in the long-term?

Chellescakes Posted 24 Jan 2013 , 11:25am

I think we are lucky here in Australia, in the state I live in our State organisation provides insurance for us for $40 a year . This covers even hobby bakers for up to 10 million and even if we do bridal fairs etc. 

 

Do any of the UK or US Cake organisations offer this?. We purchase the policy in bulk so the discount is huge. 

kimmisue2009 Posted 24 Jan 2013 , 1:31pm

The laws are there to protect logical thinking people from the you-ve-got-to-be-kidding-me-who-does-thats and the no-way-would-anyone-stoop-so-lows.  They're the ones driving the bus here, folks.  There are people who put more energy into trying to beat the system and get something for nothing than they would have to expend just being reasonable, productive members of society.  Those are the ones who will charm you out of a cake for their precious and then sue you because she gave her idiot little self a concussion beating her head on the wall because the icing was too sweet and not the right color of pink.  It's tragic, but it's the truth.

-K8memphis Posted 24 Jan 2013 , 2:20pm

yeah, kimmiesue, the laws protect...

and perturb icon_biggrin.gif

 

 

Quote:
Originally Posted by Chellescakes 

I think we are lucky here in Australia, in the state I live in our State organisation provides insurance for us for $40 a year . This covers even hobby bakers for up to 10 million and even if we do bridal fairs etc. 

 

Do any of the UK or US Cake organizations offer this?. We purchase the policy in bulk so the discount is huge. 

 

i don't know of any here

 

maybe the retail bakers association?

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