business support
You might decide to sell or close your business for many reasons, such as retirement, illness, inadequate profits or the need to raise capital for another project. Whatever the reason, it is important to begin planning the process well in advance to help you get the best price (if the business is sold) and comply with your legal responsibilities.
This section outlines some key considerations when planning the sale or closure of your business, such as:
If you decide to sell your business, ensuring that your accounts and other records are up to date is essential. This is so that potential buyers (and their accountants and solicitors) can carry out the financial and legal due diligence checks to enable them to make an informed decision.
Buyers will typically look for evidence of increasing profits and turnover, healthy cash flow, a growing customer base, and compliance with any legal or regulatory issues affecting your business.
Records that they may ask to see, for example:
You can find potential buyers for your business in a range of ways. These include listing your business on business sales platforms. Using a business broker or commercial property agent, who will typically have access to multiple business sales platforms and their own database of potential business buyers.
You can find potential buyers by listing your business on various business sales platforms.
Explore over 20,000 businesses for sale on their website. Each week, around 90,000 business buyers visit the site.
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Rightbiz is the largest marketplace for businesses for sale in the UK, covering over 5,000 locations.
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Business Sale Report is the UK's leading independent business for sale and distressed business listing service.
Find out moreIf you are leaving self-employment when you sell or close your business, you must tell HMRC by completing an online form covering self-assessment and National Insurance contributions.
You must also submit a self-assessment tax return for the tax year in which your self-employment ended. For example, if you cease trading in August 2024, you must submit a return for the tax year 2024/25.
If you are a member of a business partnership, the information that you must give HMRC depends on whether the entire partnership is being sold or just your share in it.
If it is only your share that is being sold, you just need to tell HMRC you are leaving self-employment and submit your personal self-assessment tax return by the deadline.
If the entire partnership is being sold or closed, you must also make sure that the 'nominated partner', meaning the partner with responsibility for dealing with the partnership's tax affairs, completes a partnership tax return by the deadline.
You have additional responsibilities if you sell or close a limited company. For example, if the company is sold, you must appoint new directors before resigning. You must also notify Companies House by updating the registered details of your company.
If you have financed the company with a loan secured against your personal property, for example, if you have mortgaged your home to fund the business, you must tell the loan provider about the sale within 21 days.
What you must do when you sell your company, partnership or sole trader business.
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Comprehensive guidance on closing a limited company: strike off, dissolution, voluntary liquidation, or the process of allowing it to become dormant.
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The Federation of Small Businesses has broken down the essential steps to sell your business as a sole trader, partnership or limited company.
Find out moreWhen you sell your business or its assets (such as premises and equipment), you must check whether you need to complete the capital gains pages on your self-assessment tax return. If you make a profit on the sale, you may also need to pay capital gains tax.
You may be able to claim tax relief on any profits you make, such as Business Asset Disposal Relief.
If your business is registered for VAT, you must cancel your registration when the business is sold or closed. However, you can transfer the VAT registration to the new owner in some circumstances.
You can cancel your VAT registration or transfer your registration on the GOV.UK website.
If you sell your business, your employees have certain rights under the Transfer of Undertakings (Protection of Employment) regulations (TUPE). For example, they must be kept informed about the sale, and they have some protection against dismissal or changes to their employment contract.
Visit business transfers, takeovers and TUPE at GOV.UK for more information about employee rights when a business is sold.
If you close your business, you must make your employees (if any) redundant. You must keep them informed and follow a fair redundancy process. Depending on how long they have worked for you, they may be entitled to redundancy pay.
Visit making staff redundant at GOV.UK for more information about your responsibilities when making employees redundant.
