One thing you need to remember - if HMRC investigate your business affairs they will have the right to ask for the bank statements of the account where business transactions are dealt with. Do you really want HMRC to have access to your private accounts (and therefore transactions).
-- Edited by Truemanbrown on Tuesday 26th of March 2013 11:40:34 AM
I have been a sole trader as a bookkeeper for 33 years and have never had a business account. I have an ordinary personal bank account and put all my income and expenditure for the business through this account. I have a seperate credit credit which I put my expenses on. If you require credit facilities from a supplier then you may have to go down the business banking.
I am using a separate bank account only for business purposes in order not to mix personal expenditure with company`s and to have a proper bank reconciliation.
Am I doing ok ?
Cheers
Adrian
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This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.
P.S. I only ride a motorbike because I want to dry my clothes faster
the account is seperate which is the main thing and you are not paying business rate bank charges (paying to put money in the bank still seems wrong to me, right up there with paying to pay BT!).
You may find that when the bank catches on though they enforce an upgrade to a business account. (sorry).
Also as a seperate note, if you were a limited company then the bank account must be seperate as the account belongs to the company, not the owner of the company. As I say though. Thats an aside for others reading this and not applicable to yourself.
kindest regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I am using a separate bank account only for business purposes in order not to mix personal expenditure with company`s and to have a proper bank reconciliation.
Am I doing ok ?
Cheers
Adrian
I did the same when I first started and then the bank realised what I was doing!
Shaun is right there. We get charged for putting cash into our main business account (strangely enough), so we deposit into a personal account which they moan about which is why we have to deposit small amounts at a time.
I am using a separate bank account only for business purposes in order not to mix personal expenditure with company`s and to have a proper bank reconciliation.
Am I doing ok ?
Cheers
Adrian
I did the same when I first started and then the bank realised what I was doing!
So what do the bank do in such a situation?
Do they try and reclaim (backdated) charges as you should have had a business account? Do they automatically open a buisness account for you? Do you have to go through an application process? (Can you tell who doesn't operate a buisness account?)
I would open up a buisness account but I just can't be bothered with the hassle of it and what if my application is rejected. As for HMRC seeing all my transactions - so what. I've got the detailed information for all income that goes in (if it isn't subject to tax). I have receipts for any expenses I am claiming against tax. As for any other expenses that I am not claiming against tax - I forget what they are - whatyagonnadoaboutit?
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Never buy black socks from a normal shop. They shaft you every time.
very much down to whether the branch can be bothered to do anything.
one thing to consider is that the majority of personal accounts are attached to a branch where many busienss accounts use the branch network but are actually categorised as online accounts belonging to a specific manager attached to an area rather than a branch.
Does the branch really want to see it's turmover go down by moving accounts out of branch?... That way split / merge processing lies (a fancy name for branch closure and redistribution of the accounts to more profitable branches).
I know, not very joined up thinking but in banking all areas need to show a profit. Traditionally there is little money in retail to the point that I once quipped at a meeting why don't we just give all of our clients who only have accounts and no products £50 to go to another bank.
Of course, every bank client is a potential source of income even if they are not using products at the moment so better to keep the unprofitable ones rather than allowing them to belong to the competition.
The banks arsenal of options where someone is running a business account through a personal one ranges from closing the account (unlikely) to a straight conversion of the account to a business account.
I've never heard of charges being applied retrospectively in such scenarios but hypathetically I see no reason that they could not.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
It's also worth investigating the business banking options that are available. You can probably have free business banking for the first year from most banks, but some might also have other options on top of that.
For example, HSBC's "Business Direct" account (which is what I have) - there are limitations you need to adhere to in order to avoid charges (such as encouraging clients to pay electronically rather than by cheque), but as long as you can work within those limitations, there is nothing to pay.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
I would be careful using a 'personal' account as a 'business' one rather than a business based account. As some have said the bank may catch on and ask for backdated charges. Be honest with them, get a business account, you can normally get 18 months free and some offer accountancy software as a bundle, look around.
You could even, if you want bounce accounts around to avoid charges, but you got to remember... account charges are an allowable expense so although you may resent paying them they reduce your tax liability. Another point to note is that these charges, at least to start with, will be very small, maybe 5-10 quid a month... AFTER your 12-18-24 month free period.
