Combine Instagram, Etsy, Facebook and direct orders into one gross total, before platform fees or ingredient costs are deducted.
If you sell cakes, bakes or celebration desserts from your home kitchen, whether through Instagram, Etsy, Facebook Marketplace or word of mouth, and it's moved beyond the occasional favour for a friend into a genuine, regular source of income, you're self-employed for tax purposes. Making Tax Digital applies to you the same way it applies to any sole trader.
Yes, if your gross baking income, combined across every platform and direct order, plus any other self-employment income, exceeds the relevant threshold:
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026. Live since April 2026 |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
Your gross income is your total order value received before expenses, ingredients, packaging, platform fees, food hygiene course costs are all deducted afterwards, not before, when checking your threshold.
Once registered, an Environmental Health officer may visit to check your kitchen against basic food hygiene standards, this is separate from, and in addition to, anything to do with MTD or your tax return.
Wedding and large celebration cakes are typically booked with a deposit paid months, sometimes over a year, in advance, with the balance due closer to the event. Most self-employed bakers use the cash basis, meaning income is recorded when it's received, not when the cake is delivered.
If you sell through Etsy or take payments via Instagram checkout, the platform deducts its own fees before paying you out, similar to how Etsy sellers of any product are treated. Your MTD qualifying income is your gross order value, before the platform's fee is deducted, not the net amount that actually lands in your bank account.
| Expense Category | Examples |
|---|---|
| Ingredients | Flour, butter, sugar, specialist decorating supplies bought for orders |
| Packaging | Cake boxes, boards, delivery packaging, branded stickers or ribbon |
| Food hygiene training | Level 2 Food Hygiene certificate course fees |
| Platform fees | Etsy listing and transaction fees, payment processing charges |
| Use of home | Simplified flat rate for the kitchen hours used for the business |
| Delivery | Mileage for cake deliveries, at the current HMRC rate |
Chloe's combined income of £21,000 sits just above the £20,000 Phase 3 threshold, so she'll join MTD from April 2028, based on her 2026–27 income, even though several of the weddings she's been paid deposits for haven't happened yet.
Yes. You must separately register your kitchen as a food business with your local council's Environmental Health team, free of charge, at least 28 days before you start trading. This is a food safety requirement, separate from registering as self-employed with HMRC.
The same as any self-employed sole trader: over £50,000 gross income in 2024–25 means MTD from April 2026, over £30,000 in 2025–26 means April 2027, over £20,000 in 2026–27 means April 2028.
Under the cash basis, which most home bakers use, a deposit counts as income in the tax year you actually receive it, not the year the wedding takes place. This can shift which tax year a deposit falls into for threshold purposes.
Your gross order value, before Etsy's listing and transaction fees are deducted, counts as your MTD qualifying income. The fees themselves are then claimed separately as a business expense.
If it's genuinely occasional and not run as a business with a view to profit, you likely aren't self-employed for tax purposes at all. Once it becomes a regular, ongoing activity with repeat customers, it's generally treated as self-employment, and MTD applies once you're above the relevant threshold.
Any HMRC-recognised MTD software works. The main practical need is separating gross platform sales from the fees deducted, and keeping ingredient and packaging receipts organised, which standard software handles easily.
Our free calculator checks your exact threshold, deadlines, and recommends the easiest software for your record-keeping.
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