Closing a self-employed business? You may think it’s as easy as shutting down your PC and never logging back in, but actually, there’s a bit more to it than that. Because, well…tax.

If you want to know all about the tax implications of closing your self-employed business,
read below!

What’s the first step of closing a self-employed business?

Well technically the first step is actually deciding to close your self-employed business, but anyway.👇

First things first, you need to let HMRC know what you’re doing as soon as you’ve come to the decision. You can do this online by filling out this form. Or you can call HMRC via telephone to tell them.

Once you let HMRC know, they’ll de-register you from self-employment by deactivating your UTR number so you won’t be expected to complete a tax return the following year. If you change your mind in the future, you’ll have to get HMRC to reinstate your UTR number.

If you’re registered for VAT, you should also ask HMRC to cancel this registration for you, too.

Then what comes next?

Now you’ve informed HMRC, they’ll know not to expect a tax return the following year, but that doesn’t mean you’ve escaped filing a tax return for the current tax year. 😅 You’ll still have to report your earnings for the year you closed your business.

If you stop trading on the 13th February 2024, you’ll still have to submit a Self Assessment for the 2023/24 tax year. But then you won’t have to file a tax return for the tax year 2024/25 (unless you have another reason to do one).

⚠️ Bear in mind, your final tax return will still need to be submitted before the deadline or you may face a late fee. ⚠️

What about my employee(s)?

If you’ve employed anyone in your business, they’ll probably (definitely) appreciate you letting them know as soon as possible that they’ll no longer be working with you soon.
(So that’s step one. 😅)

You’ll then need to close your PAYE scheme. You can do this by submitting a final payroll return with HMRC. You can fill in either of these forms:

I need help with my final tax return!

If you need a hand sorting your final tax return to officially close your self-employed business, one of our accredited accountants will sort your tax return and send it to HMRC on your behalf.

That way, you can focus on giving your beloved self-employed business the proper send-off it deserves.

Find out more about our services here.