How can I remove myself from Auto assessment tax?
Are you planning to return to full-time employment and would like to know how you can register as self-employed, or perhaps you’re planning to retire following a lucrative solo career? You’ll be glad to learn that notifying HMRC inform them of the change in your circumstances is a simple procedure. If you’re closing or separating from the business partnership and you want to notify HMRC, you need to:
- Informing HM Revenue and Customs (HMRC) and then deregistering to Self-assessment.
- Complete a tax return.
How can I inform HMRC I’m no longer self-employed?
There are a variety of methods to go about it:
- Call HMRC on 0300 200 3310
- If you were employed in the construction industry (CIS) Call 0300 200 3210
- Complete this form online
- Include it on you Self Assessment tax return (simply check an appropriate box)
You’ll need:
- Your National Insurance Number
- Your UTR number Your UTR number here’s how to locate the number for your UTR (if the number is lost)
What happens if you fail to inform HMRC?
If you fail to notify HMRC that you are no longer self-employed (after you’ve ended your conducting business), HMRC will continue sending tax returns for self-assessment. If you don’t respond, you could be charged penalties for late filing. In addition, HMRC may create an estimated tax bill in the event that you do not file and complete the tax returns within the timeframe. The estimated debts are legally due and be repaid only if you send the tax return within 3 years from the date of filing for the tax return.
What happens after you have deregistered?
What you need to do is:
- File your last tax return
- Make sure you pay any tax or National Insurance that you owe
- If you’re already VAT registered, cancel your VAT registration here.
- Keep all of your documents (receipts invoices, receipts, etc.) for six years
- Check that HMRC has the correct address for the twelve months following your filing of your tax return.
What will HMRC do?
- They will not request you to file an Self Assessment tax return next year (unless there is a compelling reason to file one obviously)
- They will also deduct all of your class 2. National Insurance contributions
Tax return that is final
When you have sent your final return You must:
- Find out the income from trading
- Add your allowed expenses, including the costs associated when you close your business, such as the posting costs for notifying people of your closing.
- Make sure you calculate your capital allowance including any balancing costs If you’ve sold your machinery or business equipment.
- Determine if you owe Capital Gains Tax on assets you have sold or disposed of’.
- Calculate your final profit loss.
Get in touch with an accountant for assistance on your tax return today!
In the event that your Partnership is about to end and the partner who was named as the beneficiary must submit the final Partnership Tax Return by the date.
Can I claim tax relief on my tax return?
Yes, you can cut your tax bill in the end by using the following claim:
- Entrepreneurs’ Relief
- Overlap relief is a way to protect you from having to pay twice on your earnings when you cease trading in a tax year.
- Terminal loss relief – It allows you to reduce a loss that was incurred in the tax year you last filed against the profits you made from the previous three tax years.
- Other options to cut down on amounts of Capital Gains Tax that you might be able to be eligible to claim.
The self-employment deregistration cases to keep in mind
Based on the circumstances depending on your situation, you should follow these steps:
VAT registration
Make sure to cancel the VAT registration you have if either you or your company are registered.
Employer
Shut down your PAYE scheme and submit final pay reports to HMRC when you cease to employ employees.
Insolvent
You’ll be held accountable for the business liabilities. The creditors of your business can bring you before a judge or even declare bankruptcy in the event that you fail to pay.
