1. Self-employed sole trader

When you sell your business, you have legal responsibilities to staff you employ. You must also finalise your business’ tax affairs.

Staff

If you have anyone working for you, you must tell them:

  • when and why you’re selling the business
  • about redundancy terms or relocation packages, if necessary

Make sure you don’t breach employees’ rights when a business changes ownership.

Telling HMRC

You can use the online form to tell HM Revenue and Customs (HMRC) that you’ve sold your business. It covers both Self Assessment and National Insurance.

You can also call HMRC’s National Insurance helpline to cancel your Class 2 National Insurance contributions.

VAT registration

If you’re registered for VAT, you may be able to transfer the VAT registration number to the new owner.

Tax returns

You must send a Self Assessment tax return by the deadline. You’ll need to put the date you stopped trading on the return.

Capital Gains Tax

You may have made a capital gain when selling your business (eg the money you get from the sale, or assets from the business that you keep).

If this means you need to pay Capital Gains Tax, you may be able to reduce the amount by claiming Entrepreneurs’ Relief. You may also be able to claim other reliefs.