Employers’ responsibilities when closing down a business
If you have employees, you’ll have certain legal responsibilities to meet when closing your business.
How to handle reduncancies
If you close your business, you will have to make your employees redundant.
Depending on how many employees you have and how long you have employed them for, you will have to:
- make statutory redundancy payments
- inform employees individually – and, if relevant, speak to their representatives
- follow a fair redundancy procedure
Payroll issues when closing a business
You need to tell HM Revenue & Customs (HMRC) as soon as possible if your business stops employing people you have stopped trading.
Changes to pension schemes when closing a business
You must inform and consult employees about significant changes to their pension arrangements if you:
- employ 50 or more staff
- offer an occupational pension scheme or contribute to employees’ personal pension schemes
Such changes include terminating the occupational scheme or ending your contributions to personal schemes – either of which could happen if you are closing your business.
Employee rights when closing down a business
If you close your business, you are required to treat your employees fairly and follow the correct process.