Personal account used for business?

Silver_3

I know this is a bit naughty but I’m planning to open another separate personal account to use for business as a sole trader. I’m going to be launching myself as an artist and I don’t anticipate making too much money in the first few months of trading. I anticipate very infrequent payments by cheques and cash for my work. I also want to keep it separate from my own personal account so I don’t mix up personal finances with business finances.

I was thinking of using a basic account as I can’t guarantee to put in X amount each month. I am looking at basic accounts with Nationwide, Natwest or Barclays as they all have branches in my village and I can get cash out from the post office if I have an account with one of those banks.

Does anyone have an experience of using a personal account for business?

...and does anyone have any experience of basic accounts with these particular banks? Good or bad?

I am in the process of applying for a business bank account with Abbey National so I’m already aware of low usage business bank accounts (I want to use this one for my separate ecommerce ventures as I’ll be mostly taking payments online).

Thanks in advance

Silver

Savvy_Sue

When I asked about opening a basic account at my local Post Office (because they were asking everyone to do so to keep their trade up), they told me that it wouldn't be possible to pay money in other than from benefits. I don't know if that's still the case, or if that's the way it works with all basic accounts - there must be different kinds, now I think about it, because they're also for people who have poor credit history, aren't they?

Avoid NatWest, because AFAIK you can't withdraw cash at the PO counter with them. Please tell me if it's changed, but it's one of the reasons I don't do my main banking with NatWest these days.

You don't have to put in X amount every month with all normal current accounts.

Smile offer a savings account which pays interest and gives you a cash withdrawal card. Better interest rate if you have a current account with them (which also pays interest). You can definitely pay money in at the PO with them. I like Smile a lot!

skippy64

Silver wrote:

I am in the process of applying for a business bank account with Abbey National so I’m already aware of low usage business bank accounts (I want to use this one for my separate ecommerce ventures as I’ll be mostly taking payments online).

Thanks in advance

Silver

Have you got a internet merchant account yet with someone like Streamline, LloysdTSB Cardnet etc because unless you are accepting payments by either Paypal or Worldpay you are going to need that set up first and then contact a Gateway provider such as Secpay or Protx who handle the transaction & authorisation online first of all and then pass it through to your merchant account. I must admit I find it all confusing as I have been trying to set up my online site to handle payments online. I'm sure others will be able to give other ideas as to the best route to follow. I personally have been using Abbey for business banking and have been pleased with the service so far

buglawton

Alliance & Leicester - have service at PO Counters - I have been with them for many yrs and no major !!!!-ups on their part + once or twice they've removed a charge though my fault really.

A 'business' account is not essential in order to be connected to Merchant Services from the likes of Bank of Ireland (who happen to have a close association with A&L).

If you really expect need Merchant Services - ie need to accept Credit Cards directly rather than thru Paypal or Nochex, then there are a number of steps covered in other threads eg accepting credit card payments threads.

Silver_3

Savvy_Sue wrote:

When I asked about opening a basic account at my local Post Office (because they were asking everyone to do so to keep their trade up), they told me that it wouldn't be possible to pay money in other than from benefits. I don't know if that's still the case, or if that's the way it works with all basic accounts - there must be different kinds, now I think about it, because they're also for people who have poor credit history, aren't they?

Yeah it's unclear on the website how I can put money in. It just says " you can receive payments" http://www.postoffice.co.uk/portal/po/jump2?catId=19400181&mediaId=19700174
In which case maybe a current account would be more appropriate. It also says I can cash cheques if I have a current account with:

Bank of Ireland
Barclays
cahoot
Lloyds TSB

Given that I may need cheques it might be a good idea to pick one of these then.

Savvy_Sue wrote:

Avoid NatWest, because AFAIK you can't withdraw cash at the PO counter with them. Please tell me if it's changed, but it's one of the reasons I don't do my main banking with NatWest these days.

Looks like you can do it with the basic bank account but not the current account. Odd.

Savvy_Sue wrote:

You don't have to put in X amount every month with all normal current accounts.

True. Although I'd have to check this on my application just to be sure.

Savvy_Sue wrote:

Smile offer a savings account which pays interest and gives you a cash withdrawal card. Better interest rate if you have a current account with them (which also pays interest). You can definitely pay money in at the PO with them. I like Smile a lot!

I looked at Smile a while ago as I wanted to transfer my ISA and I liked their ethical approach. I was quite impressed but my ISA isn't really worth transferring yet and I couldn't be bothered opening a current account just for the ISA. I might look at them again once I've had more of a think.

My brain hurts. lol.

Silver

Silver_3

skippy64 wrote:

Have you got a internet merchant account yet with someone like Streamline, LloysdTSB Cardnet etc because unless you are accepting payments by either Paypal or Worldpay you are going to need that set up first and then contact a Gateway provider such as Secpay or Protx who handle the transaction & authorisation online first of all and then pass it through to your merchant account. I must admit I find it all confusing as I have been trying to set up my online site to handle payments online. I'm sure others will be able to give other ideas as to the best route to follow. I personally have been using Abbey for business banking and have been pleased with the service so far

I rang Streamline about their merchant services and like you they advised me that you first do the payment with the gateway provider like Protx etc. then it goes to Streamline and then to you. Seems to be a long winded way of doing it lol. I thought it was all done once through the "merchant account".

It annoys me as there's an extra middleman taking a cut before payment reaches the business. Ah well. Still I'd rather pay it just so I can accept more customers who wish to use a credit card direct incase they not have a paypal account or are averse to it.

Silver

Silver_3

buglawton wrote:

Alliance & Leicester - have service at PO Counters - I have been with them for many yrs and no major !!!!-ups on their part + once or twice they've removed a charge though my fault really.

A 'business' account is not essential in order to be connected to Merchant Services from the likes of Bank of Ireland (who happen to have a close association with A&L).

If you really expect need Merchant Services - ie need to accept Credit Cards directly rather than thru Paypal or Nochex, then there are a number of steps covered in other threads eg accepting credit card payments threads.

Can you cash cheques ok at the PO with Alliance and Leicester? I keep hearing good things about the Bank of Ireland for business, but I don't want to tick them off using a personal account for a business in that case.

Silver

Silver_3

I've just found a pdf document listing all the banks allied with the post office outlining whether I can make cash withdrawals, cash deposits and cheque deposits etc. In terms of current accounts:

Alliance & Leister
Bank of Ireland
Clydesdale bank
Lloyds TSB

seem to offer the most comprehensive services.

Basic bank accounts:

Co-op
Bank of Ireland
Clydesdale bank
Lloyds TSB

offer good comprehensive services.

The post office card account, you are right, is only for benefits, state pensions and tax credits.

Silver

Savvy_Sue

Silver wrote:

Looks like you can do it with the basic bank account but not the current account. Odd.

Not odd, bl**dy-minded of NatWest. I suspect that a basic account HAS to offer PO access, because the people it's aimed at may live in bank-free areas (although increasingly they're finding themselves living in PO-free areas as well, but that's a different story!) The current account does NOT have to offer NatWest, the PO probably charge for the privilege, and NatWest don't want the hassle / cost.

Increasingly I don't cash cheques at the PO but hand over my switch card, btw. I can certainly do that with my A&L switch card, as your research seems to indicate.

And I fear the only answer is to read all the small print, especially about minimum payments you have to make etc. And if the rate of interest is important to you, then you have to keep checking that as well. But Smile is good!

thirtythreedragons

Personal accounts and business accounts have a different usage profile.

So if your using a personal account in an 'unusual' fashion, you might get reported for possible money laundering, and whether that goes further to affect you in other ways...

A business account may give you higher withdrawal limits, other payment and deposit facilities, better service?

buglawton

I found that the A&L business account

a) Does not allow you to pay in cheques via A&L branches (personal acct does).
b) Currently has much more complicated internet banking with a 3 day wait to reset a bungled password entry (which is extremely likely to happen).
c) Has an 0870 number an an average wait of 6 minutes to speak to someone.

But it is genuinely free and does offer slightly cheaper transfers abroad.