Going out of Business
As self-employed you can go out of business at any moment by closing or selling your business. To do so, you first have to account for all liabilities to:
- HM Revenue and Customs such as Income Tax, NICs and if applicable VAT as well as employees’ NICs and Income Tax.
- Employees (Payroll)
- Suppliers, banks and other creditors
After having sorted out all liabilities you can notify HM Revenue & Customs of your going out of business. It is very important to inform HMRC about your decision to close or sell the business as soon as possible. You still have to complete your tax return (form SA 100) for the tax year in which you stopped running a business as self-employed.
If you intend to sell or dispose your business assets such as buildings, equipment or even the business’s reputation (goodwill), you should have in mind that the sales revenues are subject to Capital Gains Tax (CGT). You have to pay CGT on the difference between what you paid for your business’s assets and their sale price.