If you’ve been freelancing or working for yourself for some time, you’ll be well aware of the process of filling out and submitting your Self Assessment tax return each year. But if your circumstances have changed and you no longer need to complete a tax return, we've got you covered.

Whether you've just not earned above the £1,000 threshold or have decided to close your business indefinitely, you need to make sure you tell HMRC if you don't think you need to complete a Self Assessment. Otherwise you could open yourself up to penalties.

How to inform HMRC you no longer need to complete a tax return

Here is a step-by-step guide on how to make sure HMRC knows you won't be completing anymore tax returns.

1. Check whether you’re required to file a tax return

First things first, check that you definitely don’t need to submit a tax return. The last thing you want to do is get in trouble for not submitting the forms or paying the tax you owe. 

HMRC has specific criteria to determine if you can stop filing your Self Assessment tax return. If your income has fallen below the filing threshold, and you don't have additional sources of income that need reporting, you might be eligible. 

You’ll need to send a tax return if, in the last tax year (6th April - 5th April), you:

• were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• were a partner in a business partnership
• had a total taxable income of more than £150,000
• had to pay the High Income Child Benefit Charge

You may also need to send a tax return if you have any untaxed income from payments such as:

• COVID-19 grant or support payments
• money from renting out a property
• commission and tips
• income from savings, investments and dividends
• foreign income

It's always best to speak to a professional accountant (like Crunch) or tax advisor if you're not sure whether these requirements apply in your circumstances.

If none of the above requirements apply, and you're sure you don't need to complete a tax return then read on to find out how to let HMRC know you’re no longer required to complete one. 

2. Let HMRC know as early as possible!

Make sure you get in there early, or as soon as you realise that you don’t need to complete a tax return this year. You may have to pay a penalty if HMRC don’t get your submission - and agree with it - before the Self Assessment deadline of 31st January.

3. Sign in to your Government Gateway account

The easiest way to let HMRC know you’re no longer required to complete a tax return is to fill in an online form. When you click on the link above, you’ll be prompted to log in to your Government Gateway account, then immediately taken to the relevant form. 

If you have any trouble with that link, you can also find the form manually through signing into Government Gateway, then finding and clicking on the section related to “changes in self-employment status” (which you’ll find in the "Self Assessment" section) and looking for options related to stopping self-employment or ceasing to trade.

4. Fill out the form and provide your business closure details

Next, you’ll be prompted to provide information about your business closure, including the date you ceased trading, any final income earned, and details of any outstanding invoices. 

Make sure all the information you provide is correct and up-to-date, and ensure you already have all of your relevant documents to hand, including your UTR (Unique Taxpayer Reference). 

5. Wait for HMRC to review your request

After you submit the online form, HMRC will review your request. If HMRC agrees, they’ll send a letter confirming you do not need to file a return. Make sure you keep this confirmation for your records.

6. Make sure you’re still fulfilling your tax duties

Even though you no longer have a duty to complete or send HMRC a tax return, make sure that you're still meeting your other tax obligations. This includes reporting any taxable income from rental properties, dividends, or other sources separately if they exceed the threshold.

Are there any other ways to let HMRC know?

Yes. You can also get in touch with HMRC using their online assistant, or by phone, or by post (if you don’t fancy doing it the digital way). 

What if you only need to stop filing a tax return for one year? 

If you’re just skipping a year but don’t want to close your business for good, you can use the same online form as above. And if you want to speak to a real person at HMRC about your situation, remember that you can always call HMRC up and explain things over the phone.

If you're feeling uncertain or have a complex financial situation, we recommend seeking advice from an accountant or professional tax advisor. They can provide personalised guidance based on your circumstances and help you navigate any complexities in the tax system.

You’re all set!

All in all, letting HMRC know they won’t be getting a tax return from you this year is a fairly straightforward process. The main things to remember are to use the correct online form, to report your details accurately, and to let HMRC know as early as possible that you’re not required to submit one. 

If you have any questions, don’t hesitate to get in touch with our team of tax experts here at Crunch. We’d be more than happy to help!