Do I need a business bank account?

WhiteCobra · 12 Mar 2013 at 19:23

Hello All

Not sure who to ask for advice regarding my issue, so I was hoping someone on here could help. I currently have a full time job, but have the opportunity to do some artwork/graphics for a large company on the side to earn a bit extra.

For reasons I can't explain here I ideally need to keep my personal identity unknown from the larger company I will be doing work for, so will be trading under a business name (I assume this will make me a sole trader?).

I'm aware I will need to do self assessment with the HMRC regarding what I earn but my biggest issue is how do I get the money into my bank. Their payment method will be BACS - but I'm not sure if I will run into any issues trading under a company name, whilst supplying them with my personal account number and sort code. For BACS to work do they need to know my name?

Will I need to apply for a business account which has my trading name registered to it?

Your thoughts and suggestions will be gratefully received

Many Thanks

4T5 · 12 Mar 2013 at 19:26

WhiteCobra said:
Hello All

Not sure who to ask for advice regarding my issue

So you came to GD.

Yes you will need a Business bank account to receive the percentage of the millions I have locked in a Nigerian bank, details in trust you know the rest.

Prince Haseem4T5nigerianoverlord&sellerofwomen.

WhiteCobra · 12 Mar 2013 at 19:30

I know GD is far from ideal, but seeing as this is the only forum I tend to lurk now I have nowhere else to go haha!

On a serious note I do plan on visiting the bank this weekend, but this offer may slip by so I need to move quick and act. I'm mainly after everyone's thoughts so I got an idea of my requirements - so I don't look like a knob in the bank

Biohazard · 12 Mar 2013 at 19:35

WhiteCobra said:
Hello All

Not sure who to ask for advice regarding my issue, so I was hoping someone on here could help. I currently have a full time job, but have the opportunity to do some artwork/graphics for a large company on the side to earn a bit extra.

For reasons I can't explain here I ideally need to keep my personal identity unknown from the larger company I will be doing work for, so will be trading under a business name (I assume this will make me a sole trader?).

Yes a sole trader trading as x.

WhiteCobra said:
I'm aware I will need to do self assessment with the HMRC regarding what I earn but my biggest issue is how do I get the money into my bank. Their payment method will be BACS - but I'm not sure if I will run into any issues trading under a company name, whilst supplying them with my personal account number and sort code. For BACS to work do they need to know my name?

You should be fine, you could even put that money into your own account as your identity cannot be worked back from your account details. They do not need your name either.

It would be a good idea to have an account for the business though so it does not become confused with your daily activities.

Once you are registered for SA as a trading as you should be able to take your confirmation to the bank and ask for an account in the trading name to be created.

WhiteCobra said:
Will I need to apply for a business account which has my trading name registered to it?

No, you can use your own current.. a new current with your name or alternatively your trading title.

Swifty55 · 12 Mar 2013 at 19:36

As a sole trader, how are you going to keep your personal identity unknown..?

Biohazard · 12 Mar 2013 at 19:39

Swifty55 said:
As a sole trader, how are you going to keep your personal identity unknown..?

By giving just the trade name?

It does seem a bit strange that they'd never catch hold of an individuals name as such, but not implausible.

Swifty55 · 12 Mar 2013 at 19:43

Biohazard said:
By giving just the trade name?

It does seem a bit strange that they'd never catch hold of an individuals name as such, but not implausible.

Always thought you had to use your personal and business name on anything official?

Thought going Limited gave you that protection?

WhiteCobra · 12 Mar 2013 at 19:45

I only need to keep my name from reaching their finance team as we've had a bad past.

Thanks for the comments Bio! Clearly I need not worry about not being able to receive payment, but I note your advice regarding separating personal and business transactions.

Having done some googling it seems Barclays, and most banks, offer free business accounts for 2 years so it would be silly not to get one. At least then if I find myself the victim of a HMRC audit I'll have no issues gathering evidence.

Biohazard · 12 Mar 2013 at 19:46

Swifty55 said:
Always thought you had to use your personal and business name on anything official?

Thought going Limited gave you that protection?

Anything official? Would be the SA registration documents to HMRC which remain private and confidential.

You then run off using the assumed trading name, ie the one you stuck on your tax registration form if you wanted to do so, and skip giving your personal details.

Thus, someone has Biohazard's Good Contracts quote on the table, signed off by the business or a position as opposed to a person, and poof..

It's up to the business or sole trader how they style their self, and if they want to use the business name instead of personal details.

To me it would be strange getting job information with no named contact at all, but again it's not unheard of.

It's not illegal for people to use 'assumed names' even if they haven't had it changed by deed poll either.

Limited liability of a registered company is something entirely different and shouldn't be confused with sole or partnership trades, they are wholly and severally liable.

etc etc

Biohazard · 12 Mar 2013 at 19:52

WhiteCobra said:
Having done some googling it seems Barclays, and most banks, offer free business accounts for 2 years so it would be silly not to get one. At least then if I find myself the victim of a HMRC audit I'll have no issues gathering evidence.

The temptation is always there to borrow, and never pay back..

If business income is separated you can't dip into it by accident, and it's much easier to manage your cash flows and calculate your tax when your bank statement can be acting like an unofficial principle ledger. It does, as you say, help with audit work too. If you ever do get looked at, you want it done sooner rather than later (and not involving your personal bank account).

gord · 12 Mar 2013 at 19:53

Another route to consider is to declare your additional income through your tax code www.hmrc.gov.uk/incometax/non-paye-income.htm. If the type of income is outside of the specification on HMRC then you can still speak to them for advice, but if it's considerable amounts they probably won't let you do this.

If you give your customer your current account details for payment then they only need a reference, so a Mr Smith would suffice.

dowie · 12 Mar 2013 at 20:07

Biohazard said:
Limited liability of a registered company is something entirely different and shouldn't be confused with sole or partnership trades, they are wholly and severally liable.

I'm wondering if hes quite aware of that bit already - he mentions trouble with the finance dept at this place and wanting to conceal his identity from them - am curious OP - did u previously run a ltd co that rand up a few debts or something?

WhiteCobra · 12 Mar 2013 at 20:31

Nope, no previous Ltd company with debts. I'm a former employee of the company I will be doing work for and relations were far from great near the end -with the finance dept.

Although the employee that currently works there is more than happy to pass the work my way I want to do this in a way that keeps said employee out of grief, whilst ensuring continued workflow my way

Swifty55 · 12 Mar 2013 at 20:38

Biohazard said:
Anything official?

Official like invoices, letters, etc..?

I'm assuming OP will be invoicing them for the services supplied?

Biohazard · 12 Mar 2013 at 21:48

Swifty55 said:
Official like invoices, letters, etc..?

I'm assuming OP will be invoicing them for the services supplied?

Then no, you could just sign them off as the trading name or a position or department within it for correspondence and invoicing. You could also use a pseudo-name, and send that. Either or. One sticks out more than the other was my point.

Biohazard · 12 Mar 2013 at 21:53

WhiteCobra said:
Nope, no previous Ltd company with debts. I'm a former employee of the company I will be doing work for and relations were far from great near the end -with the finance dept.

Although the employee that currently works there is more than happy to pass the work my way I want to do this in a way that keeps said employee out of grief, whilst ensuring continued workflow my way

You might want to carefully consider this.. if they became aware of you will as an ex-employee - depending on length of time past - they could be very agitated that you have used that knowledge to gain a competitive advantage. I'd have a look at your contract and anything you signed on release.

I don't know the ins and outs, and I don't want to, but tread carefully you could find yourself on the hard end of a legal department.

Swifty55 · 12 Mar 2013 at 21:57

Biohazard said:
Then no, you could just sign them off as the trading name or a position or department within it for correspondence and invoicing. You could also use a pseudo-name, and send that. Either or. One sticks out more than the other was my point.

If a business name is used, it can be completely different from the real name, but certain paperwork, such as invoices and correspondence, must disclose the proper name of the owner of the business.

That's what I'm going by. Obviously he could fraud his name - but is it really worth it?

I guess he could set up the business in another name (family, etc) and then set himself as 'employed' so to speak.

Biohazard · 12 Mar 2013 at 22:05

Business correspondence or invoicing to other businesses are not bound for disclosure of personal information, even in a sole trader capacity. It's mere politeness.

An assumed or alternative name is not necessarily a fraud, nor is conducting business under one.

What you are quoting from isn't quite right.

Here is the guidance;

https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

I quote;

HMG said:
Sole trader invoices

If you’re a sole trader, the invoice must also include:

*the trader’s name or any business name being used

*an address where any legal documents can be delivered to you if you are using a business name

So, you can use the business name alone as I said OR an assumed name.

Swifty55 · 12 Mar 2013 at 22:09

Biohazard said:
Business correspondence or invoicing to other businesses are not bound for disclosure of personal information, even in a sole trader capacity. It's mere politeness.

An assumed or alternative name is not necessarily a fraud, nor is conducting business under one.

What you are quoting from isn't quite right.

Here is the guidance;

https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

I quote;

So, you can use the business name alone as I said OR an assumed name.

Thanks - cleared up the confusion for me!