Once you are in Self Assessment, HMRC expects a return every year until it is told otherwise. HMRC does not usually notice that your circumstances have changed. If you have stopped trading, sold the rental property or moved the Child Benefit charge to PAYE, you have to tell it yourself. If you do not, a notice to file can still arrive and a late-filing penalty can follow.
Who can stop filing
gov.uk's guidance on telling HMRC you no longer need to send a tax return says to do it as soon as possible, and lists examples:
- You have stopped being self-employed.
- You no longer rent out property.
- You no longer pay the High Income Child Benefit Charge.
You can also tell HMRC that you did not need to send a return for a previous tax year. If you are unsure whether you still need one, use gov.uk's check if you need to send a tax return tool first.
A common trap is the income that has not actually stopped: one more invoice, a rent payment still arriving or a dividend due. Wait until the income has truly ended, or be ready for HMRC to say you still need a return.
How to tell HMRC
- Online: the HMRC cessation service on gov.uk. You must sign in; if you have no sign-in details you can create them at first sign-in.
- Phone or post: if you cannot use the online service, contact HMRC through the Self Assessment general enquiries details.
- Agents: an agent cannot use the online service and should phone or write to the agent dedicated line.
Whichever route you use, HMRC will then tell you whether you need to send a tax return. Keep a copy of what you sent. In law it is HMRC that withdraws a notice to file, under section 8B of the Taxes Management Act 1970, normally within two years of the end of the tax year and never once you have already filed a return in answer to it, which is why you ask rather than simply stop.
If you registered mainly because of the High Income Child Benefit Charge and want to pay it through PAYE instead, gov.uk says there is a separate process; telephone HMRC to switch.
Why timing matters
gov.uk says HMRC needs time to review your request before the 31 January Self Assessment deadline, and that you may have to pay a penalty if you do not tell it early enough. The risk is straightforward: if HMRC has not accepted your request by January, the return is still due. Our Self Assessment deadline calendar shows the dates, and the late filing penalty guide shows what a missed one costs.
So for a business that ended on, say, 30 June, do not wait until the following January. Tell HMRC straight after the final invoice is paid, then confirm what return, if any, you owe.
If you stopped being self-employed
Stopping a business involves more than the cessation notice, and the final return is the part people forget. The online service can be used to tell HMRC you have stopped being self-employed, and gov.uk has a separate "stop being self-employed" guide. As a rule you still report the income you made up to the date you stopped, for the part of the tax year you traded. HMRC will tell you whether it needs that return.
Practical points for the final return:
- Keep all records; see Self Assessment record keeping for how long.
- Settle any payments on account: if your income has stopped, you may want to reduce them.
- Check whether you are also registered for VAT or CIS. Those are separate registrations and need their own cancellation.
If your income is simply below the allowance
If your gross trading or property income drops to £1,000 or less and nothing else makes you file, you may no longer need a return. gov.uk says to tell HMRC as soon as possible if you believe you no longer need to send one, and HMRC will confirm. Read the £1,000 trading allowance before you do, because the allowance does not apply to every income type.
How ac-co helps
If you do still owe a return, whether for the year you stopped or because HMRC asks, ac-co drafts your SA100 from your bank, books and HMRC data, shows the full computation and files only after you approve it. Telling HMRC you have stopped remains a step you take with your own HMRC account.