Stopping self-employment
What you need to do and who to contact at HM Revenue & Customs when you stop being self-employed.
There are a number of steps to take and points to consider if you want to stop being self-employed.
Notifying HM Revenue & Customs (HMRC)
You must tell HMRC if you've stopped trading as a sole trader or you're ending or leaving a business partnership. Tell HMRC you're . HMRC will then cancel your Class 2 National Insurance contributions.
Finalising your Income Tax
You'll still need to before the deadline for the tax year in which your self-employment ended.
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See HMRC's video on how to .
Capital Gains Tax if you sell or dispose of assets
If you sell or dispose of business assets - for example buildings, equipment, fixtures and fittings, or even the business' reputation ('goodwill') - you may also need to pay Capital Gains Tax on the 'profit' (or gain) that you make.
You may be able to claim reliefs - particularly - that may reduce or postpone any gains. If you sell your own assets, you may have Capital Gains Tax to pay too.
There are other to reduce the amount of Capital Gains Tax that you may be able to claim.
Offsetting costs against your tax bill
There will be costs involved in the process of closing down your business including:
- the cost of administration, postage and telephone charges to notify the relevant authorities - eg HMRC, institutions, suppliers and customers
- the cost of professional services from solicitors, accountants, estate agents, etc
Many of these costs may be allowable expenses, which can be offset against your tax bill. See .
Offsetting losses against your tax bill
If you were self-employed and you've made a loss, you may be able to offset this loss against your tax bill for the previous three years.
Read more on .