So everyone i speak to says different, i make cakes as a hoby for friends and more recently its becoming friends of friends. For instance i done my first wedding cake last week. Everyone is asking for prices and buisness cards. orders are flooding in! Which is great i know but...

... im living in a rented two bed flat! Im assuming its impossible to run it from home with the various food hygine stipulations in place. so i cant earn money because of the tax man and i cant run a buisness from home. Tlak about a no win situation.

How much does it cost to rent kitchen space and where do you look for it?
Please help any advice welcome!

You can certainly run a cake business from home in the UK. You need to get your local environmental health to come and inspect your kitchen. They are usually very helpful, so don't worry too much. Ideally they want 2 sinks in the kitchen (1 & 1/2 bowl is usually fine) You can't do your washing at the same time as making cakes (if your machine is in the kitchen) Some have a problem with pets and some don't. The biggest problem you may have is your landlord and home insurance, as you need to get permission from them both. If the landlord has a mortgage, he will also need to get the OK from the lender too. Local councils also run food hygiene courses too (environ health look very favourably on this) We are classed as a low risk business, so the safety aspect shouldn't be an issue. You will have to tell the inland revenue and fill in a tax return every year even if you don't make a profit and you will need separate business insurance (the British Sugar Craft Guild do a cheap one if you are making less than around £6k on cakes/cookies etc) Don't forget that you also should not be making cartoon/tv characters as you don't want to get in trouble for copywrite/trademark infringement.
HTH!