Stop being self-employed
Going out of business
You can go out of business as a self-employed any time by closing or selling your business. However, first you have to account for all liabilities to:
- HMRC such as Income Tax, NICs and VAT (if applicable) as well as employees’ NICs and Income Tax.
- Your suppliers, banks and any other creditors
Once all liabilities have been sorted out, you must tell HMRC as soon as possible that you have stopped trading as a sole trader or you are ending or leaving a business partnership. You will still have to complete and submit to HMRC your tax return for the tax year in which you stopped running a business as self-employed.
It is also important to remember that if you intend to sell or dispose of your business assets such as buildings or equipment, the sales revenues are subject to Capital Gains Tax (CGT). CGT must be paid on the difference between what you paid for your business assets and their sale price.