UK law allows you to end your self-employed activity. However, remember that this involves a lot of paperwork. You must notify HMRC immediately, as well as accounting for any open liabilities and employees you will no longer employ. Remember your obligation to file a Self-Assessment, sign off your VAT or CIS. Being self-employed, you are liable with all your assets for the debts of the business, so it is important to close the business as required. If you want to make sure you do this correctly, get help from a tax office.
Can You Close a Self-Employed Business?
Yes, just as you have the right to start a business as self-employed, you also have the option to close it. When you decide to close your business, make sure to review all invoices and organize any pending documents. In closing your business, you should:
- Ensure all payments are settled.
- File your final returns with HMRC.
- Settle any obligations with suppliers, clients, and creditors.
- Finalize your arrangements with employees, if applicable.
How to Notify HMRC About Closing Self-Employment
To notify HMRC that you’re ceasing self-employment, gather your National Insurance Number (NIN) and Unique Taxpayer Reference (UTR) number. Then, fill out the relevant form on HMRC’s website with the following details:
- Email address.
- Declaration that you are no longer self-employed.
- UTR and NIN.
- Personal details.
- Date of completion.
Once you’ve entered the necessary information, confirm that everything is accurate and submit the form.
Ending self-employment – what else do you need to remember?
After notifying HMRC, remember to file your final Self-Assessment. Even if you did not earn any income, you must submit the return to avoid penalties. If you are VAT-registered, you’ll also need to deregister for VAT with HMRC. Additionally, if you stop employing staff, you must close your PAYE scheme and submit final payroll reports to HMRC.
Remember that if you operate as a self-employed person, you are liable with all your assets for the debts of your business. Your creditors can sue you if you fail to pay your debts. There is still the question of giving up your CIS. If your business is in the construction industry and you are operating under the CIS scheme, you will also need to unsubscribe from it by notifying HMRC.
Ending self-employment doesn’t have to be complicated!
Closing a business involves multiple responsibilities, such as filing your final Self-Assessment and deregistering from VAT or CIS if applicable. Failing to meet these obligations can result in fines and penalties. Instead of handling the process alone and worrying about potential errors, consider seeking help from our tax office. We can assist you in properly closing your business and settling all related obligations. Let us take care of the process for you, so you’ll see that closing a business can be easier than you think.
