When you’re self-employed, you’re the workforce, the business and the boss all rolled into one.
This can be a brilliant set-up for many self-employed people, but if your plans change and you decide to wind up the business, there are certain things you need to plan for and get right.
Your key responsibilities when ceasing to trade
As a self-employed individual, you’ll be used to managing the operational running of your own business. And the same is true when you’re planning to close down the business
There are some formalities you need to comply with when you stop trading. Although this may sound like a lot of admin, there’s real value to winding things down effectively and making sure you’ve tied up each and every last loose end.
Key things to consider will include:
If you’re registered for VAT, you should notify HM Revenue & Customs (HMRC) that you’ve ceased to trade. You can do this online, or by sending a form VAT7, and should notify HMRC within 30 days. If you have any stock or other assets where the value includes over £1,000 of VAT, the VAT must be included in the final return.
If you’re an employer you’ll need to tell HMRC that you’re closing the PAYE scheme. On your last Full Payment Submission or Employer Payment Summary you must tick the box informing HMRC that it’s the final submission because the PAYE scheme is closed down – and include the date of cessation.
Employees should be given P45 and P11D forms, and the P11D(b) submitted. Any tax and National Insurance due should be paid to HMRC. Where appropriate, you should comply with any redundancy notices, payments and procedures.
As a self-employed person, any contracts your business may have – including things like rental of premises, mobile phone contracts etc. – continue to be your personal responsibility. So, make sure you give any required notice in plenty of time.
You need to notify HMRC that you’re no longer self-employed and working for yourself. You can do this online and it will terminate your liability for Class 2 National Insurance Contributions (NICs). You will still need to complete a self-assessment return for the tax-year in which you stop being self-employed.
Talk to us about closing down your self-employed business If you’re at the end of the road with your current self-employed business, come and talk to us. We’ll help you with all the regulations and filings for closing down your business. Depending on when you normally make up your accounts to (the year-end date), the date on which you stop trading can have a significant impact on your final tax bill.
If you’re planning to stop trading in the next twelve months, talk to us in plenty of time, so we can help you with the paperwork and advise you of any factors which may affect the timings.
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For advice about Accounting and Taxation; call our team on 0203 488 7503, 01992 236 110 or contact us by email at welcome@walshwestcca.com or via our website www.walshwestcca.com
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