Sources confirm that a boom in unregistered cake sheds across the UK is generating up to £1,000 a week for home bakers, yet HM Revenue and Customs is now turning the screw. Uncovered documents from a leaked HMRC internal memo show the taxman plans to target these pop-up bakeries with retroactive assessments and fines. The cottage industry, born during lockdown, has flourished in suburban gardens and village lanes, with cash-only sales evading both VAT and income tax.
One baker, who spoke on condition of anonymity, boasted of weekly earnings of £1,200 from a shed no bigger than a garden tool store. But the dream is crumbling. HMRC sources confirm that officers are already using social media trawling and mystery shoppers to identify violators.
A father of two in Kent faces a bill of £18,000 for unpaid tax on his wife's cupcake stand. The crackdown is part of a broader offensive against the hidden economy, which officials say costs the Treasury £5 billion a year. Yet critics argue the heavy hand threatens genuine entrepreneurial spirit.
The Institute of Chartered Accountants warns that many bakers are unaware of their obligations. No suit-and-tie charity here: the state is coming for your sponge cake.
