How to Tell HMRC You Have Stopped Being Self-Employed (2026/27)

Tell HMRC online that you stopped trading, file a final return with your ceasing date, then close VAT, PAYE, CIS and MTD, and protect your NI record.

2026/27 tax year

Self-employment & Sole Trader
Self-employed (SA)
UK-wide

Summary

Use HMRC's online cessation service to tell HMRC you have stopped trading as a sole trader or left a partnership; if you cannot use it, GOV.UK says you can phone or write instead.
Stopping does not end your filing duty for that year: you still send a Self Assessment return covering the year you stopped, with your final profit or loss and the date the business ceased.
If you still have transition profit left over from the 2023/24 basis period reform and the business ceases on or before 5 April 2027, HMRC says all of it is taxed in the year you stop.
If you are VAT registered you must cancel within 30 days of ceasing to be eligible, an employer must close the PAYE scheme with a final payroll submission, and a CIS contractor or subcontractor must call the CIS helpline.
If you had signed up for Making Tax Digital for Income Tax and all your self-employment and property income has stopped, HMRC says to tell it before the start of the next tax year or you will still need to use MTD.

This guide is general information, not advice.

This is for sole traders who have stopped trading, and partners leaving or closing a business partnership. It covers telling HMRC, the final return, and the other registrations that do not close themselves: VAT, PAYE, the Construction Industry Scheme and Making Tax Digital.

By the end you will know which service to use, what goes on your last return, and what to do about your National Insurance record once the profits stop. If you are closing a limited company, this is the wrong guide: GOV.UK has a separate closing a limited company route.

Before you start

Have these to hand:

your Unique Taxpayer Reference (UTR) and Government Gateway sign-in details (you can create sign-in details the first time you use the service)
the date you stopped trading - the self-employment pages of the return ask for the final date of trading, not your usual accounts year-end
your records up to that date: sales, allowable expenses, and any business equipment you sold, gave away or kept for yourself
your VAT registration number and PAYE employer reference, if you have them
if your accounting year-end in 2023/24 was not on or between 31 March and 5 April, your records of any transition profit from the 2023/24 basis period reform

Step-by-step

Tell HMRC you have stopped. GOV.UK’s stop being self-employed page links an online service at account.hmrc.gov.uk/self-assessment/cessation. Sign in and use it; it is also the service for telling HMRC you no longer need to send a return. If you cannot use it, the no longer need to send a tax return page says you can phone or write to HMRC. Agents use the CeaseTrading online form or the agent dedicated line.
Check the £1,000 exception. If you are stopping only because you will earn £1,000 or less as a sole trader in a tax year, GOV.UK says you do not need to be registered, but tell HMRC after the end of the last tax year you were self-employed. Its example: stop on 3 March 2026, tell HMRC after 5 April 2026. You can choose to stay registered to prove self-employment (for Tax-Free Childcare, for example) or to pay voluntary Class 2 National Insurance.
Send your final return. You must still file a Self Assessment return for the tax year you stopped. The stop being self-employed page lists what it needs: trading income, allowable expenses (which may include some closing-down costs such as phone, internet and postage for telling people), capital allowances and any balancing charges on equipment sold, Capital Gains Tax on any assets disposed of, and your final profit or loss. On the 2025/26 self-employment (short) pages this is a yes/no question on whether the business ceased (box 6Q) and the final date of trading (box 6). A partnership that is ending also needs a final Partnership Tax Return (SA800) from the nominated partner.
Deal with leftover transition profit. HMRC’s transition profit guidance says that if your business ceases on or before 5 April 2027, any transition profit (after overlap relief) not yet taxed is taxed in the year the business ceased. The stop page still lists overlap relief as a relief to check; under the basis period reform it was set against transition profit on the 2023/24 return.
Claim terminal loss relief if the last year made a loss. The current HS222 helpsheet says a loss in your final 12 months of trading is set first against profits of the same trade in the final year, then against the same business’s profits in the 3 prior years, starting with the latest.
Cancel VAT if you are registered. GOV.UK’s cancel your VAT registration page says you must cancel within 30 days of no longer being eligible, for example because you stop trading, or you might be charged a penalty. You can cancel online if you have stopped trading and are not in a VAT group; otherwise form VAT7 by post. You then send a final VAT Return.
Close PAYE if you employ people. The stop being an employer page says to send a final Full Payment Submission or Employer Payment Summary, tick “Final submission because scheme ceased”, enter the date the scheme ceased, and give each employee a P45 on their last day.
Call the CIS helpline as soon as possible if you are registered in the Construction Industry Scheme as a contractor or subcontractor, as the stop page directs.
Close a Making Tax Digital sign-up. HMRC’s MTD sign-up guidance says that if all your self-employment and property income has ceased since your last Self Assessment return, you need to tell HMRC before the start of the next tax year. If you do not, you will need to use MTD. HMRC then updates your records and writes to confirm you will not need to use it.

Deadlines and what happens next

After you use the online service or contact HMRC, the no-longer-need page says only that HMRC will tell you if you need to send a tax return. It asks you to tell HMRC as soon as possible, because it needs time to review the request before the 31 January deadline and you may have to pay a penalty if you leave it too late.

The final return follows the usual deadlines: for the 2025/26 year the page gives 31 October 2026 for paper and 31 January 2027 for online returns and payment. A business that stops during 2026/27 files its final return a year later on the same rule: 31 October 2027 on paper, or 31 January 2028 online.

National Insurance. Class 2 and Class 4 are worked out on your final profits through Self Assessment. For 2026/27 the self-employed NI rates page says Class 2 is treated as paid if profits are £7,105 or more a year, and Class 4 is 6% on profits over £12,570 up to £50,270 and 2% above that. If profits are below £7,105 you can choose to pay voluntary Class 2 at £3.65 a week.

Once you have stopped, a gap may open in your record. The voluntary contributions checker page says an unemployed person not claiming benefits or getting credits can pay Class 3, as can an employee earning less than £129 a week who is not eligible for credits. Class 3 is £18.40 a week for 2026/27, per the rates page. Whether it is worth paying is covered in our voluntary NI guide.

Starting again later. Do not register afresh. HMRC’s reactivation page says to reactivate your existing account online, which also registers you for Class 2 National Insurance; the paper route is form CWF1 with your UTR.

Common mistakes

Assuming telling HMRC ends the paperwork. It does not. The return for the year you stopped is still due, and the self-employment pages ask for the date the business ceased.
Putting your accounts year-end in the ceased box. The SA103S notes say to enter the date the business ceased, not your end-of-year date.
Forgetting VAT. Cancelling Self Assessment self-employment does not cancel a VAT registration. The 30-day clock runs from when you stop being eligible.
Leaving an MTD sign-up running. If every self-employment and property source has stopped, tell HMRC before the next tax year starts.
Letting an NI gap open unnoticed. Check your record after you stop; some gaps can be filled voluntarily, others by credits.

Worked example

You stop trading as a sole trader on 30 September 2026, part way through the 2026/27 tax year. You use the online cessation service in October 2026, giving HMRC time before any 31 January deadline, as the no-longer-need page asks.

Your final return is the 2026/27 return. It shows the business ceased in the year, the final date of trading (30 September 2026), your profit up to that date and any balancing charge on equipment you sold. On the rule in the deadlines page it is due by 31 October 2027 on paper or 31 January 2028 online, with payment by 31 January 2028. Because the business ceased before 5 April 2027, any transition profit you still had is all taxed on this return, per HMRC’s transition profit guidance. If you had signed up for Making Tax Digital, you tell HMRC before 6 April 2027, the start of the next tax year.

How to register for Self Assessment - the reactivation route if you start trading again.
Self Assessment 2026/27 - deadlines, payments on account and penalties for the final return.
Voluntary National Insurance contributions - checking your record and deciding whether to fill a gap.

Frequently asked questions

How do I tell HMRC I am no longer self-employed?

Sign in to HMRC's online service at account.hmrc.gov.uk/self-assessment/cessation, which GOV.UK links from its stop being self-employed page. The same service tells HMRC you no longer need to send a Self Assessment return. If you cannot use it, GOV.UK says you can phone or write to HMRC using its Self Assessment general enquiries contact details. An agent uses the CeaseTrading online form or the agent dedicated line.

Do I still need to file a tax return after I stop being self-employed?

Yes, for the tax year in which you stopped. GOV.UK says you must send a Self Assessment return before the deadline if you stop trading as a sole trader or leave a partnership. It shows your trading income, allowable expenses (which can include some costs of closing down), capital allowances and any balancing charges, any Capital Gains Tax and your final profit or loss. The self-employment pages ask whether the business ceased in the year and for the final date of trading.

Do I pay National Insurance after I stop being self-employed?

Class 2 and Class 4 are worked out on your profits through Self Assessment, so they are settled on your final return. For 2026/27 GOV.UK says Class 2 is treated as paid if profits are £7,105 or more, and Class 4 is 6% on profits over £12,570 up to £50,270 and 2% above that. After you stop, you may be able to pay voluntary contributions to fill gaps in your record: check your record and HMRC's contributions checker first.

What if I start being self-employed again later?

You do not register from scratch. HMRC's registration service tells someone who has registered before to reactivate the existing account, which also registers them for Class 2 National Insurance. You will need the sign-in details you used before, and your Unique Taxpayer Reference if you use the paper form CWF1.