Self-employed sole trader
When you sell your business, you have legal responsibilities to any staff you employ. You must also finalise your business’s tax affairs. You must tell your staff:
- when and why you’re selling the business
- about any redundancy terms or relocation packages, if applicable.
You must make sure you don’t breach employees’ rights when a business changes ownership.
If you’re registered for VAT, you may be able to transfer the VAT registration number to the new owner.
You must send a self-assessment tax return by the deadline. You’ll need to put the date you stopped trading on the return.
If you 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), you may need to pay Capital Gains Tax, although you can reduce the amount by claiming Entrepreneurs’ Relief. There are also other reliefs to reduce the amount of Capital Gains Tax that you may be able to claim.
If you’re no longer going to be self-employed, you must cancel your Class 2 National Insurance contributions.
In addition to the self-employed sole trader details above:
- You should check your business’s partnership agreement, as it may have restrictions and conditions on the sale of the partnership.
- If you’re selling the whole partnership, you must make sure the ‘nominated partner’ also sends a Partnership Tax Return by the deadline
In addition to the self-employed sole trader details above.
Your responsibilities will be different, depending on whether:
- you’re selling the entire shareholding in your limited company
- the company is selling part of its business.
If selling the entire shareholding, you will need to appoint new directors or company secretaries. You should appoint new directors before you resign as a director yourself.
If you’ve secured finance for the company against your personal property (eg a mortgage on your house to secure a business loan), you must let the provider know within 21 days of the sale.