How do I tell HMRC I've stopped being self-employed?

Tell HMRC through its online service, then send a final tax return. If you stopped during 2026-27, that return is due online by 31 January 2028. CIS subcontractors must also call the CIS helpline.

Stopping self-employment is mostly a matter of closing things in the right order. This page covers sole traders, and follows GOV.UK as checked on 16 October 2026. Partnerships and limited companies have extra steps.

What to close, and when

Your final tax return

GOV.UK lists what goes into it:

• your trading income up to the date you stopped
• your allowable expenses, which can include closing-down costs such as phone, internet and postage for telling customers
• capital allowances, including any balancing charge if you sold equipment or machinery, such as your van
• any Capital Gains Tax on business assets you sold or disposed of
• your final profit or loss

If your last year made a loss, terminal loss relief can set it against your profit in the 3 previous tax years. Business Asset Disposal Relief can reduce Capital Gains Tax.

National Insurance for the final year is settled on the same return. For 2026-27, with profits of £7,105 or more, Class 2 is treated as paid and nothing extra is due; below that you can choose to pay voluntary Class 2 at £3.65 a week to protect your record. Class 4 is 6% on profits over £12,570 up to £50,270, and 2% above that.

If you are a CIS subcontractor

Registered subcontractors must call the CIS helpline as soon as possible after they stop. The deductions your contractors took are advance payments towards your tax. Once you stop, you may be able to get that tax year's deductions back early on form CIS40, online or by post. After the tax year ends, they are claimed back through your Self Assessment tax return; if you are in MTD, HMRC adds your CIS deductions to your MTD tax return, and any refund is requested separately through HMRC online services. Our guide on what happens to your CIS deductions when you stop trading compares the two routes.

If you are in Making Tax Digital

You must tell HMRC the date your business stopped, using your HMRC online account, by the quarterly update deadline for the period it stopped in. Then send the final quarterly update for that period and your tax return for the year, both through MTD software. After the tax year in which you stopped, you no longer use MTD, but keep your digital records.

If you are not in MTD yet but were due to join, tell HMRC that all your self-employment has stopped. GOV.UK says that if you do not, HMRC will sign you up for MTD based on the information it has.

What this means for you

Example: an electrician in MTD stops trading on 30 November 2026. That date falls in the quarter ending 5 January 2027, whose update is due by 7 February 2027, so she enters the end date by then and sends that update. Her final 2026-27 tax return, also through MTD software, is due by 31 January 2028. If she wants her CIS deductions back sooner, she can claim on form CIS40 before 5 April 2027.

If you might keep doing a little work, check the £1,000 line. You do not need to be registered if you earn £1,000 or less in a tax year, but you can stay registered, for example to pay voluntary Class 2. If you stop for that reason, GOV.UK says to tell HMRC after the end of the last tax year you were self-employed. See the trading allowance.

Steps to stop being self-employed

1. Pick your stop date and send your final invoices.
2. Tell HMRC with its online service that you have stopped self-employment.
3. If you are in CIS, call the CIS helpline and collect every payment and deduction statement for the year.
4. If you are in MTD, enter the stop date in your HMRC online account and send the final quarterly update.
5. Cancel your VAT registration if you have one, and close your payroll if you employ anyone.
6. Note what you did with the van, tools and other equipment, and what you sold them for.
7. Before 5 April, decide whether to claim CIS deductions early on form CIS40.
8. Send your final tax return by 31 January after the tax year ends, and pay any tax due.
9. Keep your records for at least 5 years after that deadline.

If Universal Credit is part of your income, report the change there too, as our guide on Universal Credit for the self-employed explains. The free MTD check shows where you stand on MTD, and the trades section has more guides for sole traders.