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There’s lots of information out there on how to register for things like your Self Assessment, Corporation Tax, and VAT – but what happens if you want to deregister?

This could be for a number of reasons; you could decide to go into employment where your taxes are taken care of by your employer, or you might sell your company and no longer need to pay Corporation Tax. In some cases, your business might continue trading, but no longer need to be VAT registered, for example.

Whatever your reason, we’ll go through the types of taxes businesses pay, and how you can deregister if you need to.
 

How do I deregister from tax as a sole trader?

How do I deregister from tax as a partnership?

How do I deregister from tax as a limited company?

Deregister for PAYE if you stop being an employer

What if I’m VAT-registered?

One of the main reasons you may want to deregister from tax is that you no longer want to be self-employed. This could be because you’re going into employment, or you know you’ll earn less than the £1,000 trading allowance from self-employment the following tax year.

Contact HMRC

The first thing you need to do is contact HMRC to let them know you believe you no longer need to submit a tax return. If HMRC agrees with you, you’ll receive a letter in the post confirming this.

Before you contact HMRC, you’ll need to have your National Insurance number and UTR number to hand.

 

You can contact HMRC by filling out an online form, using HMRC’s online digital assistant, or by phone or post.

If the reason you’re deregistering is that you’ll earn £1,000 or less, you’ll need to inform HMRC by the 5th of April (at the end of the tax year).

Submit your final Self Assessment

You need to file one last tax return before you say goodbye to self-employment! This must cover the period up until you stopped being self-employed, and needs to be completed before the deadline if you’re a sole trader. You’ll also need to include:

We understand this involves a lot of calculations – which need to be accurate. Speak to your accountant if there’s anything you’re unsure of!

Deregistering from taxes in a partnership is similar to deregistering as a sole trader, but the nominated partner will also send a final Self Assessment tax return on behalf of the partnership by the normal reporting deadline.

Limited companies are a separate legal entity to their owners, so closing one can be a bit more complicated. For instance, as well as dealing with the company you might also need to consider your own Self Assessment tax returns if you receive dividends, or PAYE if you receive a salary through the company.

Closing down your limited company

The first thing you’ll need to do is apply to close your limited company. The process for this depends on whether or not your company can still pay its bills. If it can (meaning the company is ‘solvent’), then you could:

If your company cannot pay its bills, it’s ‘insolvent’. In this instance, the interest of the people your company owes money to (i.e., creditors) legally comes first before directors and shareholders.

Learn more about closing a limited company.

 
You will normally need to:

You may also be able to let your company become dormant if you’re no longer trading or carrying on business activity, but don’t want to close it completely.

Deregistering for Self Assessment after you close your limited company

If you receive income from other sources, then closing your limited company doesn’t necessarily mean you need to stop submitting Self Assessment tax returns. In the flurry of dealing with your company, don’t forget to think about what this means for your personal tax!

If necessary, contact HMRC if you believe you no longer need to send a tax return. This is the exact same process as a sole trader and partnership – HMRC will contact you to confirm whether you need to send one or not.

There are many reasons you may need to deregister from PAYE. For example, if your sole employee has left and won’t be replaced, or because you’re closing your company and will no longer take a director’s salary.

The first thing you’ll need to do is let HMRC know you’ve stopped employing people, followed by a final PAYE submission – either an FPS (Full Payment Submission) or an EPS (Employment Payment Summary).

If you do employ anyone again in the next tax year, you can reopen your PAYE scheme by sending an FPS (Full Payment Submission) using your PAYE reference. You’ll need to submit an EPS to let HMRC if there are any months where you are not paying staff.

If you’re VAT registered and your business closes, you’ll need to deregister from VAT as soon as possible. You can cancel your VAT registration online, and in some cases (for example, if you’ve made your business dormant), you’ll have 30 days to deregister.

You can also de-register for VAT if the business will continue to trade, but:

 
Need help with submitting your final tax returns, or need to assistance changing your business structure? Whatever your tax query, get in touch on 020 3355 4047, or get an instant quote online.

About The Author

Rachael Johnston

A creative content writer specialising across business, finance and software topics. I have a love for all things writing, and creating engaging, easy to understand content that helps everyday people! Learn more about Rachael.

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