What you need to do depends on the type of business, if you’re VAT-registered and if you employ people.
Set up the new structure
Follow the normal steps to setting up as a:
- sole trader
- business partnership
- limited company
- limited partnership
- limited liability partnership (LLP)
Tell HM Revenue and Customs (HMRC)
If you’re VAT-registered, you must tell HMRC within 30 days of the change or else you’ll face a penalty.
You will need to either:
- cancel your VAT registration and re-register
- transfer your existing VAT registration
If you employ people, you’ll also need to talk to HMRC about the change.
Sell your business
If you’re a self-employed sole trader, in a partnership or own a limited company, there are certain rules you must follow when you sell your business.
Close an existing structure
If you want to close down your existing business structure, follow the usual steps.
To no longer be a sole trader
You’ll need to:
- tell HMRC you’re no longer going to be self-employed and they’ll cancel your Class 2 National Insurance contributions
- complete a Self Assessment tax return as usual (you’ll then start to submit tax returns the next year for your new business structure)
To close a business partnership
You’ll need to make sure your nominated partner fills in a tax return when the partnership ends.
If the business partnership will continue without you as a partner, you must still complete a Self Assessment tax return as usual. You’ll then start to submit tax returns the next year for your new business structure.
To close a limited company
You’ll either need to close your limited company or make it dormant.
Changing to a public limited company or an unlimited company
The guidance has information on changing a limited company to a public limited or unlimited company.