Sole trader and business bank account

Uther

Uther

Uther

Soldato
Joined
16 Jun 2005
Posts
24,324
Location
In the middle
Basically, do I need a business account? I am thinking of going self employed at a very low level, more of a hobby business really, and don't expect to make any serious money. It would be mainly cash payments, or transfers in from places like ebay. If I cleared £100 a week I would be more than happy.
I would like to keep this separate from my personal current accounts, purely to keep things simple with nics, and tax (if it even makes enough to pay tax!)
Can I get away with opening another current account for this, even a basic one? Or do banks get snotty about this and insist on a business account and its charges?
 
Yes, open a new account, a personal one and use that, you have no need for business account if you don't need the associated billing and payment systems.
Charges for business banking are steep.
 
I used to work in a bank and we were required to report (internally) a number of suspicions we might have with current accounts. One of these things was personal accounts being used for business purposes. Not all banks are the same and for a low turnover account they'll probably only grumble about it, but I imagine you'll be asked to move to a business bank account if you're found out.
 
It won't be doing any actual business banking, all he is doing is making deposits to an account. This is no different from sole traders who get paid monthly. Small deposits and bank transfers will not in any way raise suspicion, it is no different from most peoples personal accounts at the moment.
 
Up to my retirement from business I used a Nationwide Flexaccount for around 20 years and nobody ever questioned what I was doing.
 
Hikari Kisugi said:
It won't be doing any actual business banking, all he is doing is making deposits to an account. This is no different from sole traders who get paid monthly. Small deposits and bank transfers will not in any way raise suspicion, it is no different from most peoples personal accounts at the moment.
Click to expand...


If you start cashing a lot of cheques I suspect that they will jump on you.

(That is what happened to me, though this was quite a long time ago)

Whether they would jump on you for receiving lots of direct transfers or not I do not know.
 
I had loads of hassle over this years back!... i was self employed and did work for a few business's and also primary schools... so i got paid from the local authority.

I had tried to get a business bank account but was refused at every turn due to, i assume, a defaultment caused by an ex some years previously.

Things were fine for a couple of years until i got a letter from my bank ( natwest ) who wanted to "discuss my banking arrangements".

Long and short, they were saying i had to have a business bank account as a sole trader ( you dont you just need to keep accounts ) and were demanding i move to one. I agreed only to be told "sorry you do not qualify!" So they told me that my accounts would have to be closed down!

In the end i moved to the co-op bank who were fine with me having a normal account as a sole trader, they couldnt understand why natwest were such pillocks :p I still use the account to this day and i am still self employed. Just keep your accounts up to date and submit your tax return on time.
 
I'm a sole trader as a photographer and use my old HSBC personal account. Only issue is making sure cheques are made out to you and not the company name. HSBC haven't said anything to me, as a sole trader you are the company so I can't see why a business account is needed.

It's an expense I don't need at the moment.
 
You don't need a business account. In fact you don't need a bank account at all as far as HMRC are concerned.

What you do need to do, is to make sure you can separate, and by that I mean identify, business and personal income/expenditure. To that end, it's easier to open another account, but just a basic account will do.

http://moneysavinganswers.com/business/using-personal-bank-account-for-business/
 
englishpremier said:
You don't need a business account. In fact you don't need a bank account at all as far as HMRC are concerned.
Click to expand...

Regardless of what HMRC say, you will find a lot of banks have rules regarding using personal accounts for business, but that wouldn't stop me from doing it that way as a sole trader.
 
They have terms and condition that might say cannot be used for business, or for personal use only. Both of those phrases are open to interpretation, as Nationwide that term yet have said it's fine. HSBC say it depends, and Santander are coy on the matter.

Any anyway, just open a basic bank account with separate bank to your main account. There's not even a credit check, and if after trading for a while they say 'hold up this looks like business use, and we don't like it', just move the account to another bank or open a proper business then.

You'll be find as long as you aren't cashing loads of cheques (who still uses those?) or making lots of small deposits.

Good luck with the venture.
 
Thanks for the advice all.Just opened another current account with Nationwide. We already have a couple of accounts with them so it seemed the easiest option.
 
You must log in or register to reply here.
Back
Top Bottom