HM Revenue & Customs: Closing or selling a business
Closing or selling a business
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Closing or selling a business
Closing or selling a business
The decision to close or sell a business can be difficult and stressful.
But careful planning can help.
It is important to let HM Revenue & Customs (HMRC) know as soon as
possible if you stop trading or close your business. This is so that they
can help to get your tax and National Insurance in order. If you owe tax
or National Insurance and have difficulty paying it, you may be able to
negotiate an agreement with HMRC for more time to pay. And in some circumstances,
you may even be able to claim back some tax or National Insurance.
This guide explains how to let HMRC know and what you need to do to finalise
How to tell HMRC and finalise your tax
There are different areas of HMRC that you need to tell that you’ve
stopped trading or you’re selling your business. This depends on
your circumstances, such as whether you have employees or you’re
VAT registered.
If you're self-employed
If you’re a self-employed sole trader or business partner you can
tell HMRC you’ve sold or closed your business using an online form.
The form covers Self Assessment and National Insurance.
HMRC may send you a bill if you owe any Class 2 National Insurance contributions
up to the date you have stopped self-employment. You should check the
details on the bill and let HMRC know if it's wrong.
If you are registered for VAT, an employer or CIS contractor, or a CIS
subcontractor you'll also need to tell HMRC separately that you've stopped
Information you'll need to complete the online form
You'll need to provide your:
email address
date of birth
home or business address
daytime telephone number
Depending on your circumstances you'll also need your:
Ten-digit Unique Taxpayer Reference number if you have previously
completed a Self Assessment return. You’ll find this on letters
or forms sent by HMRC about your tax return
National Insurance number
As well as telling HMRC you've stopped trading, you’ll also need
to complete your tax return. Enter the date you stopped being self-employed
in the self-employment section.
If you have shares or an interest in a company that is liable for Corporation
If a company or organisation that's liable for Corporation Tax is wound
up it may still have to file Company Tax Returns and pay Corporation Tax
during the closing or winding-up process.
Any capital gains made when your company sells or disposes of its business
assets should be accounted for through its Company Tax Return.
You may have to show details of gains or losses you personally make on
the disposal of your shares or interest in the company or organisation.
To do this, fill in the Capital Gains Tax pages of your Self Assessment
tax return.
If you're an employer
You must let HMRC know as soon as possible if you stop trading. You must
also submit a final Full Payment Submission (FPS) when running your final
payroll. You need to pay any outstanding PAYE tax and National Insurance
deductions within the deadlines.
If you sell your business, you have to follow regulations that set out
your responsibilities to your employees. You can read more about these
regulations on the GOV.UK website.
If you are VAT-registered
You will need to deregister from VAT. The links below explain:
what you need to do
what happens when your registration is cancelled
how to account for the VAT you owe on your final return
what you can claim back after deregistering - see the section below:
‘What you can claim for tax and National Insurance’
If you are a subcontractor under the Construction Industry Scheme (CIS)
Call HMRC's CIS Helpline as soon as possible if you stop trading as a
subcontractor.
If you are a contractor under the Construction Industry Scheme (CIS)
If you stop trading as a contractor and you’re registered under
CIS you may need to:
complete the monthly CIS return for the month you stopped trading
as a contractor
pay HMRC any CIS deductions you have made from subcontractors' payments
pay HMRC any PAYE that's been deducted from your employees' wages
complete a tax return to cover the part of the tax year when you
stopped trading
You should call HMRC's CIS Helpline as soon as possible if your contractor
business stops trading.
This list is not exhaustive and doesn’t cover all areas of HMRC's
business. If the business area you are looking for is not mentioned above
or you are in any doubt please contact HMRC.
What you can claim for tax and National Insurance
Cost of closing down
There will be costs involved in closing down your business, such as the
cost of administration, postage and telephone charges to notify everyone.
Many of these costs may be allowable expenses, which can be set against
your tax bill.
Find out more about allowable expenses and reliefs for businesses that
are liable for Corporation Tax by following the link below.
Setting losses against your tax bill
If you were self-employed and you've made a loss, you
may be able to set this loss against your tax bill for the previous three
If your company or organisation has made a loss in its final accounting
period, the company may be able to carry it back to set against its total
profits over the previous three years.
Reclaiming VAT after you deregister
Once you’ve cancelled your VAT registration, there are circumstances
in which you can reclaim VAT paid on your purchases. The link below explains
those circumstances and tells you what you can claim and how you can reclaim
any VAT you’re owed.
Handling capital gains issues
If you’re self-employed and selling or disposing of business assets
when you close your business, you may be liable to Capital Gains Tax on
any gains you make. But, you may be able to claim reliefs (particularly
Entrepreneurs' Relief) that may reduce or postpone the tax.
You should also bear in mind that, if your business is a limited company,
you may be able to claim Income Tax relief if your shares have become
worth next to nothing.
Getting someone to act on your behalf
You don't have to deal with HMRC personally. An accountant or other adviser
can act on your behalf.
What to do if you have problems paying HMRC
What to do if you can't pay
HMRC expects all customers to pay their tax when its due. However they
understand that as a result of circumstances outside your control, this
isn't always possible - especially during the current economic climate.
Telling HMRC you have stopped trading or are selling your business will
help you avoid getting unnecessary payment demands.
The following guidance explains what to do if you think you can't pay
what you owe HMRC.
What could happen if you don't pay HMRC what you owe?
If you've received a bill from HMRC that you can't pay, it's important
to contact them as soon as possible to try to come to an arrangement.
They may give you extra time to pay possibly by instalments. If you don't,
and your bill remains unpaid, HMRC will start proceedings to recover the
The following guidance sets out what you need to do and who to contact.
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Closures include 55 Kmart, 30 Sears and 31 Sears Auto Center locations.
6,067 workers will lose their jobs.
Pennsylvania, Michigan and Indiana are hardest hit.
[This article is now out of date. For the latest store closures, .][Update: Nine additional Kmart stores have been added to this list since publication. Those stores are in Centre, AL; Claymont, DE; New Port Richey, FL; Forest Park, IL; Iron Mountain, MI; Reidsville, NC; Warren, PA; Dickson, TN and Dale City, VA.]Sears Holdings Corp. (NASDAQ: ) is laying off at least 6,067 workers and closing over 110 Kmart, Sears and Sears Auto Center locations, many before Christmas.Sears spokesman Howard Riefs declined to speak by phone. &We disclose our store counts at the end of each quarter,& he said via email. &We don't have further comment.&Riefs' name, however, appears at the bottom of individual liquidation sale notices sent to local media since mid-September. Inquiries with stores, mall managers and reporters across the country reveal that at least 55 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers are scheduled to close before the end of January. Most notably, Sears is liquidating its location at the largest mall in America, the King of Prussia Mall in suburban Philadelphia, and will instead sublet the space to Primark, a low-cost Irish apparel chain. Sears closed its flagship Chicago store in April. More closures could be added, as new liquidations have become public as recently as Wednesday. The following table will be updated.(Story continues below.)All things must go: Exclusive list of closures at Sears Holdings Corp.[This chart is now out of date. For the latest store closures, .]StateCityStoreLocationLayoffsLiquidation BeginsCloses ALCentreKmart1525 Chestnut Byp.54November 2January 18 ALDothanSears + Auto662 W Main St.68September 26Early December ALHuntsvilleKmartHuntsville Center73November 2Mid January CARocklinKmart5615 Pacific St.63October 31Mid January CAYuba CityKmart850 Gray Ave.63September 28December 7 CTTorringtonKmart681 Main St.73September 28Early December DEClaymontKmart333 Naamans Rd.87Late SeptemberEarly December FLClearwaterSears Auto OnlyWestfield Countryside21N/ASeptember 13 FLNaplesKmartPark Shore Plaza72November 2Mid January FLNew Port RicheyKmart5725 US 1958September 28Early December FLWinter SpringsKmart1425 Tuskawilla Rd.69November 2Mid January FLZephyrhillsKmart7422 Gall Blvd.68September 28Early December IAAmesKmart1405 Buckeye Ave.44September 28Early December IACliveKmart10331 University Ave.49September 26Early December IAFort DodgeSears + AutoCrossroads Mall41October 31Mid January ILBloomingtonKmartColonial Plaza79November 2Mid January ILDanvilleSears + AutoVillage Mall63September 26Early December ILForest ParkKmart7630 W Roosevelt Rd.107September 28Early December ILForsythSears + AutoHickory Point Mall45September 26Early December ILPeoriaKmartEvergreen Square73September 28Early December INBedfordKmartTown Fair Center62September 28December INDecaturKmart804 S 13th St.49September 28Early December INFort WayneKmart820 N Coliseum Blvd.69September 28Early December INGreenwoodKmart860 Hwy. 31 S78November 2Mid January INIndianapolisSears + AutoWashington Square Mall91September 28Early December INIndianapolisKmart2715 Madison Ave.131September 28Early December INIndianapolisKmart7425 E Washington St.139September 28Early December INMuncieKmart1501 E McGalliard Rd.59September 28December KSWichitaSears + AutoTowne West Square103September 26Early December KYOwensboroSears + AutoTowne Square Mall52September 26Early December MDBaltimoreKmartNorthwest Plaza107September 28Early December MEPresque IsleSears + AutoAroostook Centre Mall63October 31January 18 MIAnn ArborKmartMaple Village59November 2Mid January MIBay CitySears + AutoBay City Mall47October 31Mid January MIBurtonKmart1145 N. Belsay Rd.85September 28Early December MIFlintKmart3083 Miller Rd.81September 28Early December MIIron MountainKmart1800 S Stephenson Ave.54November 2Mid January MIMadison HeightsKmart29101 John R Rd.179September 28Early December MIPort HuronKmart1179 32nd St.188September 28Early December MIRochester HillsKmart1100 S Rochester Rd.77September 28Early December MIWaterfordSears + AutoSummit Place Mall75September 26Early December MNAnokaKmart1100 W Main St.47September 28Early December MNBlaineKmart8949 University Ave. NE60September 28Early December MNBurnsvilleKmart14230 Burnhaven Dr.62September 28Early December MNWaite ParkKmart40 2nd St. S57September 28Early December MOFlorissantKmartDunn Center100September 28Early December MTBozemannKmart1126 N 7th Ave.37November 2Mid January MTGreat FallsSears + AutoHoliday Village Mall65September 26Early December NCCarySears OnlyCary Towne Center66October 31Mid January NCGastoniaSears + AutoEastridge Mall65September 19December 19 NCKinstonKmartKinston Square64September 28Early December NCReidsvilleKmart1623 Way St.54September 28Early December NDDickinsonKmartPrairie Hills Mall41September 28Early December NEOmahaKmart13405 W Maple Rd,50September 28Early December NHClaremontKmart367 Washington St.59September 28Early December NJParamusKmart859 N Route 1774September 21Early December NJRandolphKmart140 Route 1091October 5December NMAlbuquerqueKmartHilltop Plaza59September 28December 7 NYAuburnSears + AutoFingerlakes Mall51October 31Mid January NYIthacaSears + AutoIthaca Mall37September 26December NYMassenaSears + AutoSt. Lawrence Centre51October 31Mid January NYSyracuseKmartErie Blvd E92November 2Mid January OHFairbornKmartFive Points Plaza66September 28Early December OHMarionSears Auto OnlySouthland Mall9N/ASeptember 27 OHSolonSears + Auto6221 SOM Center Rd.53SeptemberEarly December OHSpringfieldKmart1476 Upper Valley Pike68September 28Early December OKEnidSears + AutoOakwood Mall38October 31Mid January ORAlbanySears + AutoHeritage Mall57October 31Mid January PABloomsburgSears + AutoColumbia Mall57October 31January 18 PAChambersburgSears + AutoChambersburg Mall62October 31Mid January PAFrackvilleSears + AutoSchuylkill Mall84October 31Mid January PAKing of PrussiaSears + AutoKing of Prussia Mall114October 24Early December PALebanonSears + AutoLebanon Plaza51October 31Mid January PARochesterKmart300 Brighton Ave.78September 28Early December PATarentumSears + AutoGalleria at Pittsburgh Mills97October 31Mid January PAWarrenKmart1666 Market St.62September 28December 7 PAWest MifflinSears + AutoCentury III Mall88September 26Early December SCMyrtle BeachKmart1403 N Kings Hwy.59September 28Early December TNDicksonKmart301 Henslee Dr.65September 28Mid November UTWoods CrossKmart680 W 2600 S54September 28Early December VAChesapeakeSears + AutoChesapeake Square82October 31Mid January VADale CityKmart2851 Dale Blvd.69September 26Early December VAFront RoyalKmartRoyal Plaza88November 2Mid January VTRutlandSears + AutoDiamond Run Mall65September 26Early December WIGlendaleSears + AutoBayshore Town Center67September 26Early December WIJanesvilleKmart2233 Old Humes Rd.70September 28Early December WVBluefieldSears + AutoMercer Mall64September 26Early December[Update: A previous version of this story said the Washington Square Mall Sears and Sears Auto Center in Evansville, Indiana were closing. It is in fact the Washington Square Mall Sears and Sears Auto Center in Indianapolis, Indiana that are closing. The Evansville locations will remain open, according to Sears spokesman Howard Riefs.]States hardest hit by the closures include Pennsylvania, Michigan and Indiana, as well as New York, Florida, Ohio, Illinois and Minnesota. Many of the shutdowns have dealt blows to malls and surrounding communities that were already in decline. Other shopping centers quickly revealed new tenants as replacements.These closures add to the 96 stores Sears Holdings announced it had closed in the first half of fiscal 2014. That compares to 93 locations shuttered in all of 2013. Riefs would not explain whether these earlier numbers count Sears Auto Centers separately from Sears department stores. Some Sears and Sears Auto Center locations are closing independently of each other, and liquidation notices refer to the two formats separately.In brief statements to local media, Sears said the closures were part of an effort to &reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model.& But some analysts have been more fatalistic about the company's prospects, warning that Sears is &,& that the company has &,& and that && for the retailer. Sears has responded to similarly negative analysis as being &,& adding, &We have substantial resources available to us to fund our transformation.&Revenue at Sears has declined for 30 straight quarters. The Hoffman Estates, Illinois-based company has posted losses of over $1.8 billion over the past four quarters, and shares in the retailer have lost more than a third of their value over the past year. Bloomberg reported earlier this month that at least one vendor has
to the company, adding that insurers have cut coverage for Sears' suppliers, raising questions among observers about the company's ability to secure merchandise for the holiday period. But Sears called that report && and asserted that its stores are well-stocked.Liquidating stores isn't the only way Sears is raising cash. The company has announced a variety of other initiatives to boost liquidity, including a $400 million loan from CEO Edward S. Lampert's eponymous hedge fund, ESL Investments, announced in S $168 million raised from selling Sears Canada stock to ESL and a $625 million bond offering announced on Monday, which ESL will also participate in.The Fitch credit rating agency downgraded Sears' issuer default rating to &CC& last month.Shares in Sears Holdings were down 1.06% Wednesday to close at $34.42.
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