Small Business Bank Accounts Discussion Area

Savvy_Sue

duscoobster wrote: »

This question has probably been asked and answered already but I did a search and couldn't find anything.

I am starting out as a sole trader soon and organising my bank accounts. What I want is to put the money I will put aside for tax into a high interest (as possible anyway) savings account. I had a meeting with a business banking advisor who said I could have a savings account attached to my business account, but the interest rate is shocking. I asked if I could put it into a personal savings account instead and she told me I shouldn't do that. Sadly we ran out of time so I couldn't get her to elaborate on that.

Is there anything actually stopping me from using a personal savings account for this purpose? Is it unwise, will I be charged more for some reason if I do this? Its just alot of money to be sitting in account waiting to go to the tax man and not actually doing anything.

Any help you can give me is greatly appreciated!

Sometimes I post things quickly in the hope that it will prompt wiser people than me to correct me if I'm wrong. This is one of those times.

As a sole trader, you and your business are indivisible. So if you decide to take money out of your business bank account and put it into your personal savings account, I don't see that there's a problem, because it's your money just as much as it is the business's money, and so you can store it where you like. If you then move your money out of your savings account and back into the business account in order to pay the taxman, again, I can't see a problem. Actually as far as HMRC are concerned, they won't care where the money comes from, as long as they get it. They regard YOU as personally liable for the tax, and your sole trader business doesn't exist apart from you.

Two warnings:
KEEP EXCELLENT RECORDS OF WHAT YOU ARE DOING!

DO NOT TREAT IT AS YOUR PERSONAL SPENDING MONEY SO THAT IT IS NO LONGER THERE WHEN THE TAXMAN WANTS IT!

Personally, I'd open a separate savings account for this purpose rather than using an account you already have, but I wouldn't flag it as a business account in any way.

Now, if you were a limited company, the answer would be different, because you and your limited company are separate legal entities. So moving the company's money into your personal account and back again should probably only be done on your accountant's advice and with properly documented evidence of the purpose of the moves. Note that limited companies are way outside my field of expertise, I just know it's complicated, and as a sole trader this need not currently concern you.

It's entirely possible that the member of staff you spoke to was advising you as if you were a limited company, and obviously using a personal account for business purposes is against the bank's terms and conditions, hence their advice.

Time for the wiser heads ...

castelnau

Can I get some recommendations on high interest savings accounts for small businesses please? We are a LTD company.

Many thanks
Jo
Castelnau Tiles

bs7

HSBC are putting prices up (from December 2014) and it seems removing the couple of free cheques that you could write before.


I've tried the Co-Operative but their online banking site looks like it was designed in the early 90s and never updated and is tricky to use.


Any recommendations for a cheaper business current account with decent online system?


thanks

CaptBigglesworth

Have you looked at RBS? I was with HSBC until past year when they started charging for business banking. As I have negligible counter transactions, I didn't fancy paying!
RBS is free, so have a look. Online services are fine for my needs too.

phill99

I'm with Santander.

I'm on the old account so its permanently free, the new one is free for the first 18months and then £7.50 a month after.

Its a postal account so has no branch network. You pay cash in via Santander cash points and pay cheques in the same way or by free post envelopes via the normal postal system.

The website is easy to use and they have an app for you phone or ipad which you can carryout basic transactions on (pay bills, check balances etc).

You can call them and I've found the staff are always helpful.

In a world of business banking where the objective of the banks is to fleece businesses, Santander are probably the best of a bad bunch.

bs7

CaptBigglesworth wrote: »

Have you looked at RBS? I was with HSBC until past year when they started charging for business banking. As I have negligible counter transactions, I didn't fancy paying!
RBS is free, so have a look. Online services are fine for my needs too.

Does that account come with a cheque book though or debit card?


Natwest seem to have a similar option but when you look at it you get charged 84p per cheque and £3.75 per month too.

CANALSAILMAN

Anybody recently changed business banks to Santander or currently using them, looking at changing to them from Lloyds as we could save/earn £400 a year.

The reviews on some of the sites are shocking and do not recommenced it as it can months to switch and the customer service is useless.

Do the review site usually only usually get negative reveiws or am I been optimistic?

Cheers

Savvy_Sue

I don't know about the business side but I do know on the personal side that Santander have managed to turn their dire customer service around.

Aquamania

CANALSAILMAN wrote: »

Anybody recently changed business banks to Santander or currently using them, looking at changing to them from Lloyds as we could save/earn £400 a year.

The reviews on some of the sites are shocking and do not recommenced it as it can months to switch and the customer service is useless.

Do the review site usually only usually get negative reveiws or am I been optimistic?

Cheers

Look again at the same review site and see what is said about Lloyds

Insomniscene

I'm looking to open a business bank account for a part time business I've been planning for some time - my plan is to wander around the banks and ask for advice, to see what they can offer.

Is this wise?

Also - if I open a business bank account, will I undergo a credit check?