{"id":23298,"date":"2023-11-20T14:25:37","date_gmt":"2023-11-20T14:25:37","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=23298"},"modified":"2025-09-05T17:10:27","modified_gmt":"2025-09-05T16:10:27","slug":"fool-proof-guide-to-closing-a-self-employed-business","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/blog\/fool-proof-guide-to-closing-a-self-employed-business\/","title":{"rendered":"Fool-proof guide to closing a self-employed business"},"content":{"rendered":"\n

Closing a self-employed<\/a> business? You may think it\u2019s as easy as shutting down your PC and never logging back in, but actually, there\u2019s a bit<\/em> more to it than that. Because, well\u2026tax.<\/p>\n\n\n\n

If you want to know all about the tax implications of closing your self-employed business, read below!<\/p>\n\n\n\n

What\u2019s the first step of closing a self-employed business?<\/h2>\n\n\n\n

Well technically the first step is actually deciding to close your self-employed business, but anyway.\ud83d\udc47<\/p>\n\n\n\n

First things first, you need to let HMRC know what you\u2019re doing as soon as you\u2019ve come to the decision. You can call HMRC via telephone<\/a> to tell them.<\/p>\n\n\n\n

Once you let HMRC know, they\u2019ll de-register you from self-employment by deactivating your UTR number<\/a> so you won\u2019t be expected to complete a tax return the following year. If you change your mind in the future, you\u2019ll have to get HMRC to reinstate your UTR number.<\/p>\n\n\n\n

If you\u2019re registered for VAT<\/a>, you should also ask HMRC to cancel this registration for you, too.<\/p>\n\n\n<\/div> \n\n

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The <\/span>value added tax (VAT) rates<\/b> in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n\n\n\n\n\n\n
<\/td>\nTax rate<\/span><\/td>\nWhat the rate applies to<\/span><\/td>\n<\/tr>\n
Standard rate<\/span><\/td>\n20%<\/span><\/td>\nMost goods and services<\/span><\/td>\n<\/tr>\n
Reduced rate<\/span><\/td>\n5%<\/span><\/td>\nGoods and services like children\u2019s car seats and home energy<\/span><\/td>\n<\/tr>\n
Zero rate<\/span><\/td>\n0%<\/span><\/td>\nGoods and services like most food, books and children\u2019s clothes<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

*Businesses earning more than \u00a390,000 in a tax year must register for VAT. See <\/span>here<\/span><\/a> for more<\/span><\/p>\n\n <\/div>\n<\/div> \n\n

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Then what comes next?<\/h2>\n\n\n\n

Now you\u2019ve informed HMRC, they\u2019ll know not to expect a tax return the following year, but that doesn\u2019t mean you\u2019ve escaped filing a tax return for the current tax year. \ud83d\ude05 You\u2019ll still have to report your earnings for the year you closed your business.<\/p>\n\n\n<\/div> \n\n

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Key dates in the current <\/span>2025\/26 tax year \ud83d\udc47<\/b><\/p>\n\n\n\n\n\n\n\n\n
Deadline<\/b><\/td>\nDate<\/b><\/td>\nYear<\/b><\/td>\n<\/tr>\n
Tax year starts<\/span><\/td>\n6th April<\/span><\/td>\n2025<\/span><\/td>\n<\/tr>\n
Tax year ends<\/span><\/td>\n5th April<\/span><\/td>\n2026<\/span><\/td>\n<\/tr>\n
Register for self assessment<\/span><\/td>\n5th October<\/span><\/td>\n2026<\/span><\/td>\n<\/tr>\n
Pay tax bill by PAYE salary<\/span><\/td>\n30th December<\/span><\/td>\n2026<\/span><\/td>\n<\/tr>\n
Self assessment deadline<\/span><\/td>\n31st January<\/span><\/td>\n2027<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n <\/div>\n<\/div> \n\n
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\u26a0\ufe0f Bear in mind, your final tax return will still need to be submitted before the deadline<\/a> or you may face a late fee. \u26a0\ufe0f<\/p>\n\n\n\n

What should I include in my final tax return?<\/h2>\n\n\n\n

When sending your final tax return, you should ask yourself all<\/em> of the following:<\/p>\n\n\n\n

Can I claim any allowable expenses?<\/h3>\n\n\n\n

If you spend any money closing down your business, you may be able to claim a tax relief for these costs to reduce your tax bill.<\/p>\n\n\n\n

Here are a few examples of what can be classed as an allowable expense when closing a self-employed business:<\/p>\n\n\n\n