Business Bank Accounts

[Ponty Massive]

Out of interest (Mainly for sole traders), do you use a business account or a private current account?

 

[wade88]

I was wondering this too,

I started up a business account in an attempt to be organised and keep all my self employed work seperate from my regualr PAYE job. Being totally in the dark about being self employed as its a new venture i have taken up, i am very ignoratn regarding my tax entitlements and what i can/cant claim for etc.

I severely need a chat with an accountant...however, i was led to believe that i wanted to claim for clothes, tools, fuel etc, they must have been purcahsed through my business acount, as that is under my trading name, where as my current account of course is just under my...regular name...so to speak ha, am i wrong in thinking i can only claim tax back on purchases made from my business account?

As far as their usefulness, the bank manager didnt really emphasise the benefits to me, other then highlighting the fact, after two years i must pau £5 a month for the privelage of having one, and i have to pay money to the bank everytime i withdraw cash...which seems somewhat barbaric to me, to pay money to someone for taking my own money...thats def the business to be in huh. "you just took out some of you OWN money to buy YOURSELF a garden lounger with which to relax on after a hard days work, but first you must give ME some too....thanks" :dizzy2:

 

[brucelee]

yes I would like to know this is a business bak account required for sole trader and tax purposes

 

[topquark]

You are only required to have a separate bank account for a limited company. However having said that HMRC do prefer a separate account for business.

If you have used your own money to buy goods from the business then you can claim it from the business and either withdraw the funds to compensate yourself or add it to the directors capital account.

 

[brucelee]

Cheers mate

i have used lots of my own funds lol and this is coming out of personal account

will have a look at different banks business accounts I was going to go ltd but i think at first its better to go sole trader because of extra costs incurred with ltd

ltd is better to protect assests but i have none lol so no use for it yet then
see how we go once i set up

I agree with above poster about banks charging you to take your own money out do they charge if funds are transferred from business account into personal account by bank transfer

 

[topquark]

A lot of banks will give you a year or two of "free" trading for a business account (as long as you don't go overdrawn) so shop around.

Costs for limited aren't that bad (you can set one up using a setup company for about £50, but don't buy an existing one if you go that route, coz you'll inherit their credit status as well). You then have the annual return to file (costs about £18 from memory and your annual account costs). Even with a Ltd Co you'll probably find yourself having to provide personal guarantees etc for any finance (vans etc) so not really that separate anyway.

I'd try and keep it simple for as long as possible (maybe setup a personal savings account to use for the business part of your funds and keep it separate).

 

[Amp David]

The only reason i had to get a business account was the bank pulled it up when i kept on paying in cheques made out to my business. Its 2 years free anyway.

You can always get a second personal account and see, your bank might not even mention anything about it

 

[Octopus]

I'd recommend a Business Account for all sole traders. It keeps your business dealings seperate and is much easier for your accountant at year end.

You'll probably get 18 months free banking too. My experience is that after the free period ends the charges aren't too back as long as you pay your bills by BAC's and also encourage your customers to pay you by BACs too. I use mine to pay my NI fees from and that also makes the auditing/any tax investigations, should they arise much easier to deal with.

Having a single bank account must be a recipe for disaster IMHO.

 

[brucelee]

Cheers to all

will look into the different banks see waht they offer which knowing how they have been recently wont be good lol

 

[Octopus]

I should have added, its all well and good looking for the cheapest banking deal BUT think about the location and ease of access to the bank. I can walk to mine in about 7 minutes or park almost outside free.

"Free" banking with a bank, 1 hour away, when you have to pay for parking everytime you visit, isn't such a great idea.

 

[Ponty Massive]

I should have added, its all well and good looking for the cheapest banking deal BUT think about the location and ease of access to the bank. I can walk to mine in about 7 minutes or park almost outside free.

"Free" banking with a bank, 1 hour away, when you have to pay for parking everytime you visit, isn't such a great idea.

Excellent ideal there and never really thought of that ^^^^^

I have a seperate account for my business and all my business transactions go through there. The only problem is, as it's a personal account and not a business account, when I get paid by cheque I always need to tell them to write it out to me personally and not the business name, which I feel always looks a bit suspicious especially when I'm charging VAT.

I would like to set up a business account, but as most of my payments are made by cheque, it's a bit annoying paying the bank to keep my money or charge me when I take it out!!

 

[Guest123]

When I opened my business account with barclays (not with them anymore) I got a free microsoft quickbooks package as a welcome gift. Dont know if they still do this, probably not, but maybe worth seeing if anyone has any sweeteners on the go.

 

[SPARTYKUS]

You are only required to have a separate bank account for a limited company. However having said that HMRC do prefer a separate account for business.

If you have used your own money to buy goods from the business then you can claim it from the business and either withdraw the funds to compensate yourself or add it to the directors capital account.

.....or just keep the receipt. And argue the case for a pair of snickers and steel toe caps later should the need arise!

 

[SPARTYKUS]

Murdoch, spot on about access. Was with Abbey internet banking for ages ... but it took .... ages to get the money as you could only post it ....so a cheque came, then went in post, was eventually processed.... eventually cleared... then transferred to my First Direct account (took days..... usedto take WEEKS to get the money.




nearest bank to me is a HSBC. same bank as my personal account. hey presto! money comes quicker now.

 

[wade88]

i got a free mouse mat with a new bank account once...was well chuffed. Had a little pig on it. Top banana