When you sell your business, you have legal responsibilities to staff you employ. You must also finalise your businessâ tax affairs.
Self-employed sole trader
Staff
If you have anyone working for you, you must tell them:
- when and why youâre selling the business
- about redundancy terms or relocation packages, if necessary
Make sure you donât breach employeesâ rights when a business changes ownership.
Telling HMRC
You can use the online form to tell HM Revenue and Customs (HMRC) that youâve sold your business. It covers both Self Assessment and National Insurance.
You can also call HMRCâs National Insurance helpline to cancel your Class 2 National Insurance contributions.
VAT registration
If youâre registered for VAT, you may be able to transfer the VAT registration number to the new owner.
Tax returns
You must send a Self Assessment tax return by the deadline. Youâll need to put the date you stopped trading on the return.
Capital Gains Tax
You may have made a capital gain when selling your business (for example the money you get from the sale, or assets from the business that you keep).
If this means you need to pay Capital Gains Tax, you may be able to reduce the amount by claiming Entrepreneursâ Relief. You may also be able to claim other reliefs.
Business partnership
Your responsibilities when selling a partnership depend on whether youâre selling:
- your share of the partnership
- the entire partnership
Staff
If you have anyone working for you, you must tell them about the sale, including:
- when and why youâre selling the partnership
- details about the redundancy terms or relocation packages you will offer, if required
If youâre stopping self-employment
If youâre stopping self-employment when you sell the partnership, call HM Revenue and Customs (HMRC) to cancel your Class 2 National Insurance contributions.
VAT registration
If the partnership is registered for VAT, you may be able to transfer the VAT registration number to the new owner.
Tax returns
You must fill out a personal Self Assessment tax return by the deadline.
If youâre selling the whole partnership
You must:
- make sure the ânominated partnerâ sends a Partnership Tax Return by the deadline
- send your personal Self Assessment tax return by the deadline
Capital Gains Tax
You may have made a âcapital gainâ when selling the partnership (for example the money you get from the sale, or assets from the partnership that you keep).If this means you need to pay Capital Gains Tax, you may be able to reduce the amount by claiming Entrepreneursâ Relief. You may also be able to claim other reliefs.
Limited company
Your responsibilities will be different, depending on whether:
- youâre selling the entire shareholding in your limited company
- the company is selling part of its business
Appoint new directors or company secretaries
You should appoint new directors before you resign as a director yourself.
Tell Companies House to make these changes.
Capital Gains Tax
You may have made a âcapital gainâ when selling the company (for example the money you get from the sale, or assets from it that you keep).
If this means you need to pay Capital Gains Tax, you may be able to reduce the amount by claiming Entrepreneursâ Relief. You may also be able to claim other reliefs.
Charges against your company
If youâve secured finance for the company against your personal property (for example a mortgage on your house to secure a business loan), you must let the provider know within 21 days of the sale.
VAT registration
If the company is registered for VAT, you may want to transfer the VAT registration number to the new owner.
If your company sells part of the business
If any employees are affected by the sale (for example the companyâs selling its production business and factory staff will be affected), you must tell them about the changes, including:
- when and why part of the company is being sold
- details about the redundancy terms or relocation packages, if necessary
