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  • business accounts

    hi, I'm just trying to start up a business, I know I have to register with the ILR and keep basic accounts for self assessment, but do I need a business account or just a separate current account.
    I imagine most of my sales will be cash or via paypal.
    thanks leanne
    leanne

    Folksy

    Etsy

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  • #2
    Biz accounts

    First time I ever set up a business I got an accountant, first thing he said was don't get a business account until the bank sit up and take notice of what your doing.
    Kev
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    • #3
      I agree with Kev on this one. Business accounts are where banks make their money - most current accounts are free so they have to get their dosh from somewhere!

      A few months ago we moved a cash amount from a personal account into the business account (both with the same bank). We were charged for moving it and then a few weeks later we drew it out and were charged for that as well!

      I'd definitely keep it on a personal level until you absolutely have to.

      Not sure if its any good but the Post Office do a business account that is supposed to be very reasonable compared to the big banks. Might be worth a look.
      Auntynet

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      • #4
        Some of the suppliers I deal with will only accept me as trade if I hold a business account. Mine is with Lloyds but you can get free banking for business's with Alliance & Leicester and Abbey, neither charge for withdrawals or deposits or a monthly fee.
        Others may disagree but you should have a separate account from your normal one even if it is still a personal account. If the tax office asked to see your statements as a spot check at any time you would have to go through every deposit in detail and prove where it came from. In other words have a separate account for the business even if it is just a personal account, hope this is clear, I know it can be confusing.
        I have remained with Lloyds because my business manager is brilliant and being a small village I like the personal touch, knowing all the cashiers has always helped me and I never have a problem at trade shows or suppliers etc.

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        • #5
          Hi, if you register as a sole trader (the most straightforward option for a one man band), you're under no obligation to set up a business account. Personally, I've never had a supplier query what sort of account I'm paying from.

          I still use my own current account but track every penny in and out related to the business in a spreadsheet, and that's sufficient for me at the moment. I went on a free small business workshop run by HMRC (or whatever they're calling themselves this week) which was really useful in explaining how to do your tax returns, what expenses you can claim etc. You'll probably be offered the same when you register, and I'd definitely recommend going.
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          • #6
            Just to clarify my previous reply, I am qualified in accounts and legal accounts and the advice I gave was as I have been trained and advised to give. I also have business accounts with suppliers both in the UK and USA and had to supply references, one of those being a business bank account a personmal account would not have been valid.

            If you are doing your own books and tax return you may be quite happy keeping just the one bank account, if however you want an accountant do to this for you, they will have to be supplied with all your bank statements, cheque books etc. You may not want him seeing your personal affairs and want to restrict it to business, hence the separate account.

            I do the sole trader accounts for some other business's and I know when I took over one lot of books it took me ages and cost them money for me to sort out what was personal and what was business. The fact that you can now open another personal bank account foc I cannot see the point of not doing so, you can always change this over to business later if things take off.

            Try the following link they have networking events in several areas:

            http://www.businesslink.gov.uk

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            • #7
              Biz account

              Here's a sort of relevant personal experience. A couple of years ago I did set up a business account for a limited company. I browsed the internet and Alliance & Leicester looked good so I started downloading the app form, then realised how many pages it was and fancy colours wasting ink so aborted that and got it posted to me, long story short we had to keep phoning them to query things one guy insisted we needed info which companies house said we didn't have to provide, but he said they were wrong, we were sending stuff to the then getting requests for more info, took about two weeks also had to go to a local branch to get some papers signed or something and they didn't know what the hell they were doing. I had to tell them. In the end we abandoned them made an appointment with HSBC and within the hour had set up account cheque books cash card credit card chip &pin machine etc.
              Kev.
              www.steampunkkaleidoscopes.com
              www.steampunkrelics.co.uk
              If you think you can do a thing or if you think you can't you will be right. Henry Ford

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              • #8
                Separate account is easier

                It is much easier to keep all your expenses and revenue straight having a separate account that is used strictly for business. However, there is nothing that requires it to be a business account, per se. As long as it is used strictly for the business, it will cover you when it comes to taxes, etc.
                It may not be difficult to keep track of at this point but if you're business picks up or you expand into new areas, it can quickly get overwhelming.
                to make spa products for fun or profit

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                • #9
                  I can absolutely see the benefits of keeping a separate (personal) account for your business - it just wasn't something I did when I started and a year on my 'system' is working fine for me. My point was more that it isn't a legal obligation. I look forward to the day when there's so much money coming in I can't keep track of it.....
                  www.CeeGeeJewellery.com Handcrafted Sterling Silver Jewellery
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                  • #10
                    Originally posted by CeeGee View Post
                    I can absolutely see the benefits of keeping a separate (personal) account for your business - it just wasn't something I did when I started and a year on my 'system' is working fine for me. My point was more that it isn't a legal obligation. I look forward to the day when there's so much money coming in I can't keep track of it.....
                    Don't we all?!!
                    Cynthia
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                    • #11
                      thanks for all your replies, I think i'll wait abit and see how things go then set up a personal account. I'm enjoying the creative side of it all but the business side is the scary bit!!
                      leanne
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                      • #12
                        Don't be Scared

                        This is a very helpful thread to those thinking of starting up in business, I have been self-employed for many years and have always found help and advice whenever I needed it. So don't be scared to start up, just ask for help and good luck with your venture.
                        Chris W.
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                        • #13
                          business accounts

                          Hi

                          I was self-employed for 6-7 yrs & set up a separate business account with Barclays - what a waste of money!! Free banking for the first year (to reel you in!), then fees for every withdrawal & deposit.

                          Just set up a separate personal account with a bank or building society & you'll pay no fees as long as you're in credit - don't try & add in your trading name (eg Jane Smith trading as Janes Jewellery) as this will tell the bank you want to use it as a business a/c. Just make sure you only use it for your business, this includes any money you are going to pay yourself. The breakdown of every transaction you'll have receipts or invoices for & you'll account for it when you send in your Tax Form.

                          iSome suppliers do want your bank details but I've never had any of them ask whether its a business or personal account & some of my suppliers were big companies within the furnishing industry, they usually want your bank details if you're setting up a credit a/c but not if you are setting up a proforma a/c (paying when you place an order) Good Luck Sharon

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                          • #14
                            I'm looking to set up a separate personal account to start my business with - just to make my life easier!
                            Can anyone recommend a bank account that provides a debit card and cheque book, where I don't have to pay in a minimum amount each month??

                            Stacey

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                            • #15
                              I did use my family account for a while and it was a bit complicated trying to keep track of what I was putting in and taking out. Being a small hobby business I didn't see why I should pay the bank to do that either. I use Abbey National as they have free banking service for small businesses for life. Of course there are limits on what you can put in and take out but I dont ever see me earning £3000 in one month (the deposit limit for this account)
                              The one drawback is that I cant go into the bank. I have to use the hole in the wall for deposits and withdrawals and if I have any problems with the account I have to telephone them or write to them. To be honest I haven't really needed to do any of this. You get a business cheque book and a visa debit card. I hope this information helps some of you but I realise there are not that many branches of the Abbey. I have to go to the next town to do my banking. Hubby came up with an idea though. He could have set up a direct debit from our account to the business account so if I didnt feel like going to the next town then I could make the deposit into the family account and then direct debit it to the business account. But I havent need to do this yet as I quite like my wee jaunts to the next town


                              PS I just thought now that I have mentioned which bank I use on the forum...just wait and see the amount of hoax emails I get supposedly from the Abbey ....lmso
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