Self Employed Bank Account

loobs40 · 22 December 2004 at 1:03PM

I am just about to regsiter to be self employed. I already have a current account with Cahoot, but I'm wondering if it would be better to have another current account dedicated just to in and outs of the business i.e to keep everything separate.

Also I think it would be better to receive statements in the post from the bank/building society for the purpose of record keeping. The one downside of Cahoot in this respect is that the only statements are the ones I print and I'm not sure if that is acceptable to the Inland Revenue.

Does anyone have any advice about this ?

A quick look around the web sites and LloydsTSB seem to have a current acct that would fit the bill, and there is also a branch in my town

thanks

Debt_Free_Chick · 22 December 2004 at 1:15PM

First off, you don't need paper statemens for the Inland Revenue. You just need complete & proper records for everything you spend i.e. reciepts and recieve i.e. invoices.

A statement can be handy if you have a missing reciept though.

Under self-assessment you just fill in a tax return - no requirement to send statements. But you might need statements if you are ever subject to an Inland Revenue investigation.

I run a second current account for my business. It's helpful to keep the business & personal finances separately. Firstly, so you can easily see how well the business is doing and secondly, because you can draw off your "wage" from the business account and pay it to yourself, by transferring it to your personal account.

Don't forget to save money for your tax bill! I put 1/3 of what my business receives into a savings account, to pay future tax.

In summary, go for a simple current account. You don't need any "bells & whistles" as you'll have those with your personal account. You just want somewhere to pay money in and a way of getting it out.

And do lots of research on the records you need to keep and accounting issues of being self-employed - best to get it right from day one.

Finally ... remember to register as self employed with the Inland Revenue

https://www.inlandrevenue.gov.uk

Good luck

loobs40 · 22 December 2004 at 1:51PM

Thanks !

I think I will go down to Lloyds (and the other banks in town) and get some information this morning

Fatboy_NSS · 31 December 2004 at 4:59AM

If you need a separate account for your business dealings then you should really open a business account, especially if you need to keep a record for the Inland Revenue. If you're happy with your existing cahoot account then you could consider Abbey, who are one of the few banks who don't charge any fees for business bank accounts.

Big_Alf_2 · 9 January 2005 at 12:01AM

Alliance and Leicester are pretty good too - they're also free for at least the first 18 months

lasvegaschris · 4 September 2009 at 11:35AM

if you are self employed do you need a business bank account, or can you just use a separate current account?

PlutoinCapricorn · 4 September 2009 at 11:40AM

A lot depends on the scale and volume of your business. If you are buying and selling on a large scale and/or have a limited company then a business account is necessary. If you are a home based part time researcher who gets a few cheques each month, then having a business account is overkill, especially if your trading name is your own name.

I would suggest using a personal account unless and until you are forced to do otherwise.

If you have large numbers of transactions the bank might object to a personal account being used.

Self Employed Bank Account

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