{"id":11428,"date":"2023-06-27T03:37:29","date_gmt":"2023-06-27T03:37:29","guid":{"rendered":"https:\/\/www.theukrules.co.uk\/?page_id=11428"},"modified":"2023-09-13T10:42:29","modified_gmt":"2023-09-13T10:42:29","slug":"stop-being-self-employed","status":"publish","type":"page","link":"https:\/\/www.theukrules.co.uk\/rules\/business\/closing-down\/stop-being-self-employed\/","title":{"rendered":"Who to Notify When You Stopped Being Self Employed in UK"},"content":{"rendered":"<p>The most important government organisation you must tell is HM Revenue and Customs (HMRC).<\/p>\n<p>You must notify HMRC any time you stop trading as a sole trader or you end (or leave) a business partnership.<\/p>\n<p>There will be other responsibilities and obligations as well, especially if you employ people, such as:<\/p>\n<ul>\n<li>Sending in your final tax returns.<\/li>\n<li>Letting any of your employees know that you will stop being their employer because you will <a href=\"\/rules\/business\/closing-down\/\">close down your business<\/a>.<\/li>\n<\/ul>\n<p><strong>Note<\/strong>: You still need to tell HMRC you stopped being self-employed even if you do not employ any staff.<\/p>\n<p><\/p>\n<hr>\n<p><\/p>\n<h2>Tell HMRC You Will Cease Trading<\/h2>\n<p>You can use an online form to <a href=\"https:\/\/www.tax.service.gov.uk\/shortforms\/form\/CeaseTrading\" target=\"_blank\" rel=\"noreferrer noopener\">tell HM Revenue and Customs<\/a> you are stopping self-employment, selling or closing your business, or have never been self-employed.<\/p>\n<p>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 <a href=\"\/rules\/employment\/taxation\/national-insurance\/rates-and-categories\/\">Class 2 National Insurance contributions<\/a>.<\/p>\n<div class=\"category-wrapper\">\n<div class=\"list-content\">\n<h5>Sending Your Tax Returns<\/h5>\n<p>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.<\/p>\n<p>There will be several workings for you to determine when you send your Self Assessment tax return, including:<\/p>\n<ul>\n<li>Adding up your <a href=\"\/rules\/business\/tax\/allowable-expenses\/if-you-are-self-employed\/\">allowable expenses<\/a> for being self-employed. The total amount might include some of the costs related to closing down the business (e.g. Internet, phone, postage, letting people know).<\/li>\n<li>Calculating your trading income and your <a href=\"\/rules\/business\/tax\/capital-allowances\/when-selling-an-asset\/\">capital allowances<\/a> (remember to include any balancing charges if you sold business equipment or machinery).<\/li>\n<li>Working out whether you owe any <a href=\"\/rules\/employment\/taxation\/capital-gains\/cgt-overview\/\">Capital Gains Tax<\/a> on assets you sold (or &#8216;disposed&#8217; of).<\/li>\n<li>Calculating the final profit or loss figures for your business.<\/li>\n<\/ul>\n<p><strong>Note<\/strong>: The nominated partner should <a href=\"https:\/\/www.gov.uk\/government\/publications\/self-assessment-partnership-tax-return-sa800\" target=\"_blank\" rel=\"noreferrer noopener\">file a Partnership Tax Return<\/a> if a business partnership is ending (before the <a href=\"\/rules\/employment\/taxation\/self-assessment\/deadlines-and-penalties\/\">Self Assessment tax return deadlines<\/a>). You may need professional help (e.g. an accountant or <a href=\"\/rules\/employment\/taxation\/income-tax\/help-and-advice\/\">tax adviser<\/a>).<\/p>\n<\/p><\/div>\n<div class=\"list-content\">\n<h5>Claiming Tax Relief<\/h5>\n<p>In some cases, you would be able to claim some reliefs to reduce your final tax bill, such as:<\/p>\n<ul>\n<li><a href=\"\/rules\/employment\/taxation\/capital-gains\/entrepreneurs-relief\/\">Business Asset Disposal Relief<\/a> (may reduce the amount of Capital Gains Tax you need to pay).<\/li>\n<li>Overlap relief (may prevent you being taxed twice on any profits when you stop trading during a tax year).<\/li>\n<li>Terminal loss relief (may offset a loss made in the last tax year of trading against profit made in the previous three tax years).<\/li>\n<\/ul>\n<p>The <a href=\"https:\/\/www.gov.uk\/government\/publications\/how-to-calculate-your-taxable-profits-hs222-self-assessment-helpsheet\" target=\"_blank\" rel=\"noreferrer noopener\">HS222 Self Assessment helpsheet<\/a> provides further information for working out taxable profits. Other reliefs claimed on <a href=\"\/rules\/employment\/taxation\/capital-gains\/cgt-for-business\/\">Capital Gains Tax for business<\/a> may also reduce the amount of CGT owing.<\/p>\n<\/p><\/div>\n<\/div>\n<div class=\"category-wrapper\">\n<div class=\"list-content\">\n<h5>If You are VAT Registered<\/h5>\n<p>You must <a href=\"\/rules\/employment\/taxation\/vat\/change-registration-details\/\">cancel VAT registration<\/a> if you were operating as a sole trader or partnership and already registered for Value Added Tax.<\/p>\n<\/p><\/div>\n<div class=\"list-content\">\n<h5>If You have Employees<\/h5>\n<p>What if your business stops employing people? In this case, you must also close your PAYE scheme. So, once you <a href=\"\/rules\/employment\/employing\/payroll\/\">stop employing staff<\/a> you would need to send final payroll reports to HM Revenue and Customs (HMRC).<\/p>\n<\/p><\/div>\n<\/div>\n<div class=\"category-wrapper\">\n<div class=\"list-content\">\n<h5>If the Company is Insolvent<\/h5>\n<p>As a rule, even though you stop being self employed you will still be &#8216;personally&#8217; liable for any business debt that you have. Failing to pay means the creditors can take court action or enforce <a href=\"\/rules\/business\/debt-and-bankruptcy\/\">bankruptcy proceedings<\/a>.<\/p>\n<p><strong>Note<\/strong>: There may be other options available for paying off your debts (such as Individual Voluntary Agreements).<\/p>\n<\/p><\/div>\n<div class=\"list-content\">\n<h5>Construction Industry Scheme (CIS)<\/h5>\n<p>What if you are self employed and registered as a CIS contractor or subcontractor? In this case, you must <a href=\"\/rules\/business\/tax\/construction-industry-scheme\/contractor\/who-cis-covers\/\">contact the CIS helpline<\/a> without delay if you will no longer be in self-employment.<\/p>\n<\/p><\/div>\n<\/div>\n<p><\/p>\n<hr>\n<p><\/p>\n<div class=\"updated-data\">\n  <strong>Who to Tell If You Stop Being Self Employed in United Kingdom<\/strong><br \/>\n  <time datetime=\"2022-01-01\">Last Updated 2022<\/time>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>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: Sending in your final&hellip; <a class=\"more-link\" href=\"https:\/\/www.theukrules.co.uk\/rules\/business\/closing-down\/stop-being-self-employed\/\">Continue reading <span class=\"screen-reader-text\">Who to Notify When You Stopped Being Self Employed in UK<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"parent":698,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"inline_featured_image":false,"footnotes":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Who to Notify When You Stopped Being Self Employed in UK - UK Rules<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.theukrules.co.uk\/rules\/business\/closing-down\/stop-being-self-employed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Who to Notify When You Stopped Being Self Employed in UK - UK Rules\" \/>\n<meta property=\"og:description\" content=\"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. 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