You should tell HMRC that your trade has finished as soon as possible, so that HM Revenue & Customs (HMRC) can get your tax affairs in order. This should also bring your Class 2 National Insurance bills/ Direct Debits to an end as well. The easiest way to do this is to use HMRC’s online form called ‘Stopping self-employment’. You'll need to provide your contact details, date of birth and (depending on your circumstances) you'll also need your Ten-digit Unique Taxpayer Reference number or National Insurance number.
Please note, the online form only covers self assessment and National Insurance, so if your business was say, VAT-registered, you will need to separately notify HMRC of the cessation of the VAT registration.
You will also need to complete a tax return for the tax year in which the trade stopped. Once HMRC have processed this, they may send you a letter stating that they no longer require a return from you if your only source of income is from employment.
Computing the profits or losses from a trade in its final year can be tricky, particularly with regards to Capital Allowances and the use of losses. But your local TaxAssist Accountant would be happy to complete your final return for you and deal with notifying HMRC of the cessation of the trade. Please feel free to contact us for more information or your free initial consultation.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.