Title
Ceased being self-employed?
Pub Date
28/07/2016
Category
HMRC notices
Character
Number
Summary

It is important for taxpayers to follow the correct steps if they stop trading as a sole trader or are ending or leaving a business partnership. This is so that HMRC can help to get the taxpayer's affairs in order. Taxpayers that have ceased to be self-employed must inform HMRC of their change in status.

Taxpayers must send in a Self Assessment return by the relevant deadline and will need to work out their trading income, allowable expenses and any capital allowances. Taxpayers must also determine if they have any Capital Gains Tax to pay. In certain circumstances taxpayers may be able to claim back tax or National Insurance. It is also important to check if there is an entitlement to tax relief utilising: entrepreneurs’ relief, overlap relief and / or terminal loss relief.

Taxpayers that owe tax or National Insurance and have difficulty paying it, may be able to negotiate an agreement with HMRC for more time to pay.

In addition, where a VAT registration was in place this will also need to be cancelled and anyone who employed staff will need to close their PAYE scheme and submit final payroll reports.