The council said it had consulted on and considered its street trading policy over the last two years.
It added that its licensing committee had agreed cake sheds should be covered by it, because of the food safety and hygiene implications, monitoring, potential annoyance to neighbours and to be fair to existing traders.
It added cheaper six-month licences, or trading at fairs, are alternative options, and the fees are reduced after the first year.
A spokesperson said: “It is important to note that there can be a large variation in the scale of ‘cake sheds’, which can range from simple tables with honesty boxes, to larger operations that sell pre-packaged goods, advertise on social media and accept contactless card payments.
“While the main scope of the policy is directed at larger businesses who wish to trade from a fixed location, there are currently no concessions that can be applied to residents who wish to sell baked goods though ‘cake sheds’.
“Our licensing team has been instructed to take a proportionate and pragmatic approach to enforcement based on the individual circumstances.
“Any fines would only result from a successful prosecution in the most serious cases, where a trader has persistently sold goods without a licence.”
But it is the uncertainty about the scope of the rules that leaves sellers like Natalie worried.
“It really isn’t worth taking the risk,” she said.
“Everything’s so uncertain. It’s so unfair to be treated as a large business when we’re selling a few brownies.”