There are a number of organisations to notify if you stop being self employed. Use this checklist to find out who to tell and what to do if you stopped being self-employed.
The most important government organisation you must tell is HM Revenue and Customs (HMRC).
You must notify HMRC any time you stop trading as a sole trader or you end (or leave) a business partnership.
There will be other responsibilities and obligations as well, especially if you employ people, such as:
Note: You still need to tell HMRC you stopped being self-employed even if you do not employ any staff.
You can use an online form to tell HM Revenue and Customs you are stopping self-employment, selling or closing your business, or have never been self-employed.
The date you notify them must not be earlier than seven (7) days before the date you stopped self-employment. But, once HMRC get notified they will also cancel your Class 2 National Insurance contributions.
You need to file your Self Assessment tax return before the deadline if will stop trading as a sole trader. The same would also apply if you are leaving a business partnership.
There will be several workings for you to determine when you send your Self Assessment tax return, including:
Note: The nominated partner should file a Partnership Tax Return if a business partnership is ending (before the Self Assessment tax return deadlines). You may need professional help (e.g. an accountant or tax adviser).
In some cases, you would be able to claim some reliefs to reduce your final tax bill, such as:
You must cancel VAT registration if you were operating as a sole trader or partnership and already registered for Value Added Tax.
If you will stop being an employer you must also close your PAYE scheme. So, once you stop employing staff you would need to send final payroll reports to HM Revenue and Customs (HMRC).
As a rule, even though you stop being self employed you will still be 'personally' liable for any business debt that you have. Failing to pay means the creditors can take court action or enforce bankruptcy proceedings.
Note: There may be other options available for paying off your debts (such as Individual Voluntary Agreements).
What if you are self employed and registered as a CIS contractor or subcontractor? In this case, you must contact the CIS helpline without delay if you will no longer be in self-employment.
Who to Tell If You Stop Being Self Employed in United Kingdom