Starting a business from home

JKell

Hi
We would like to start a food/cake business to sell home made cakes & food to local people. What do I need to keep in mind to make sure we don't violate any laws and local legal requirements?

I understand I need to first register with our local council and take some Food Hygiene courses. Is there anything that I need to consider for my home mortgage and insurance?

I'm assuming the monthly income is likely to be around £300-400 - do we need to register with HMRC, get a VAT registration, etc.?

I am planning to see an accountant - but trying to get as much information as possible before I spend any money

Jim

MichaelWard

Have you decided the name for your cake business. You should contact your local chamber of commerce in your state to determine if any special license is needed and to register your business as a legal entity. Even many of the state requires to set up a commercial kitchen. So, also check that. Best of luck dear.

soolin

MichaelWard wrote: »

Have you decided the name for your cake business. You should contact your local chamber of commerce in your state to determine if any special license is needed and to register your business as a legal entity. Even many of the state requires to set up a commercial kitchen. So, also check that. Best of luck dear.

This is a UK forum and we have different rules and there is no need to check anything to do with a legal name with a 'State', sole traders can also trade under their own name (as I do)

OP, you will need to register with HMRC and make arrangements to either pay NIC or apply for exemption if your earnings fall below the required level, you will also need to keep full accounts and do a self assessment form each year for tax purposes.

DomRavioli

Don't forget your public liability insurance. Can find it on most insurance comparison websites, your council may also have a list if you're struggling.

You shouldn't need an accountant at this stage - no point spending money on that unless you are a commercial operation with large orders and complex acounting - sounds like you're a home based sole trader. Accounts are pretty simple, HMRC website will help you along with it.

Also VAT - unless you have massive turnover or being VAT registered would be beneficial, there isn't much point. A lot more paperwork and accounting for a small business.

lincroft1710

Even more important, don't forget your product liability insurance

System

The local authority may have requirements in regards to inspecting the premises where you're doing the baking.

JKell

Thanks a lot !

what is the difference between Product and Public Liability Insurance?

Am i insuring my business and myself against any liabilities and legal claims if "something" happens to "someone" after consuming my products?

lincroft1710

Product liability is insurance against claims for damage/injury/illness caused by something the policyholder makes/constructs/assembles as part of his business. Public liability is where damage or injury is caused by the business.

If you drop a tray full of cakes on a customer's foot, then the claim is against your Public Liability Insurance.

If a customer chips a tooth because of a piece of grit in your cake, then the claim is against your Product Liability Insurance.

Fallen-Angel

Contact local environmental health to arrange an inspection of your kitchen.
You don't have to do any food courses but they are best practise unless it's changed, when I sold cakes the fact I was a McDonald's manager in a previous role meant I didn't have to update anything.
Check your mortgage and home insurance - some of them won't allow working from home or may need to alter your agreement.
Order a copy of Safer Food Better Business as this will prepare you for your inspection - you can also ask you EHO what they are specifically looking for.
Insurances
Register as self-employed

Make sure you have things like a fridge thermometer so you can take daily readings.

Good luck