Temporary continuation, deceased Self Assessment, VAT, PAYE, employees, valuation, Business Relief and sale or wind-down.
This guide is part of ProbateHelp's Estate Assets guide cluster. Estimated reading time: 10 min.
Not under one universal rule. The business has no separate legal personality, but personal representatives may need to preserve, complete, sell or temporarily carry on activity. Authority, the will, contracts, licences, solvency, insurance, employees and tax determine what is possible.
HMRC decides whether a return is required and sends the personal representative the form and filing date. It can cover income, including business income, arising before death. Post-death income or trade carried on by the estate is accounted for separately.
No. HMRC's VAT manual allows a personal representative who temporarily carries on the business to be treated as the taxable person under regulation 9. A cessation, transfer as a going concern or continued trade can require different VAT action.
HMRC's PAYE manual says the deceased sole trader's employer record is ceased and outstanding PAYE and National Insurance are established with the personal representative. Continued employment or a successor trade needs payroll and employment advice rather than reuse of the old record without confirmation.
Do not assume one outcome. Continuation, a transfer, termination and insolvency can produce different rights to wages, notice, holiday, redundancy or government payments. Preserve payroll records and obtain urgent employment advice before making promises or dismissals.
Qualifying business property can use the combined £2.5 million 100% Agricultural and Business Relief allowance for deaths on or after 6 April 2026, with 50% relief normally applying above it. The two-year ownership and trading conditions and asset exclusions still matter.