Cake shop supplies are Zero rated?

Hi, I am looking to know if the cake shop (baked birthday, marriage cake and dine-in or eat ) is zero-rated, exempt or standard rate supplies. Can you confirm the following: 1) What VAT rate should apply on Cake shop sale supplies? 2) If it is zero-rated, what will the next step will be if the sale just touches the 90k VAT threshold? 3) If I apply for VAT registration should apply for a VAT exception or just apply to get a VAT number and continue to submit the VAT quarterly as usual? your answer to the above and any comments/advice will be highly appreciated Many thanks and I am looking forward to hearing from you. Best regards, Saif

Hi,

The liability of cakes is generally at the zero rate of VAT. You can see the guidance at section 3.6 here:

Food products (VAT Notice 701/14)

If the cakes are being consumed on the premises then this will be a 20% supply of catering. You can see guidance here:

Catering and takeaway food

If your taxable supplies are above £90000, then you would need to register for VAT. However, you can choose to apply for an exemption if most of your sales are zero rated. Please see the guidance at section 3.11 here:

Working out whether you need to register

Thank you.