Accounts for small business set-up??

beany63

Hiya!
I'm setting myself as self employed, and the only thing that's confused me is bank accounts. Is it necessary to have a 'business' account, or is it true where I read that if you're only dealing with cash/cheques and NOT card transactions (which is me), a normal current account is all that's needed?
I don't really need to borrow money/loans etc, as I do clothing alterations and have the relevant equipment already. I work from home, it works out that I pick up the clothing from various stores/customers with my car so all I really get is cash in hand, and just need somewhere to store it (and keep seperate from personal current account, to make life easier).
Thanks for ANY advice!
beany63

MalcolmCooper

Sounds like you just need a separate current account. It would be a good idea to shop around for a new business bank account to take advantage of free banking deals and help and advice offered by the banks. I never thought I'd recommend a bank because I don't generally like them but my experience with business banking at HSBC is very good.

Look at your local chamber of commerce, the Federation of Small Businesses and other organisations who often have special rates for members available with certain banks.

Do keep your business banking separate and you must get an accountant. You don't need a big firm of accounts, just a local independent certified account will be fine. He or she will show you what records to keep and keep the tax man off your bank. An accountant isn't just a good idea, it's essential.

Best wishes,

Malcolm

PosterBoy77

I would suggest that you take a look at the abbey business account. The other high street banks just rip-off businesses. The abbey one is fee-free and also pays good interest on any spare money.

saubryn

I second the Abbey one. Be warned they want a 50 pound deposit to open a business account, and a second 50 if you want a business reserve account for saving for tax, etc. Once its open though their facilities are nice, and the 'free' banking is a nice break from the 'free for a year' most other places do.

oldfella

also use Abbey - the "deposit" goes straight into your account - you can do what you like with it

Mike

beany63

Ok thanks guys. It's quite overwhelming but I like to do all the aspects of business myself, without borrowing things and having to pay for things I don't need. I'll keep all this in mind! Cheers!

Kilty_2

You don't NEED a business account, but its handy.

One thing is, cheques can either be paid to Mr/Mrs X OR your trading name if you have a business account. With a personal account you can only take cheques that have been made out to your name.

Although saying that, I'm a freelance web designer and run everything through a seperate personal account.

inmypocketnottheirs

jackdoor wrote:

This sort of cobblers could only come from seomone in the trade!

And this sort of cobblers could land you in trouble! Anyone in business needs proper taxation advice and the only source of this information is a reputable (preferably recommended) firm of accountants. They do not need big fancy offices, but someone who knows what they are doing. I pay £650 a year to my accountant, but believe me he saves me thousands.

beany63

Hmm, I'm a bit confused about the accountant thing, I must say. Do I legally need one? Or is it something that just saves a lot of time and effort but not something I can't do myself? But the advice on here has been ace so far. I feel more prepared when I go into my bank next week to chat about it. (halifax, by the way!)

alimbee

We set up in business at the beginning of last month and have found Abbey to be really easy to use. The only thing that took a bit to get used to is posting your cheques (you can pay them into a cash point but it takes 1 day extra to clear). Customer service seems good (not often you can say that!) and they are in Glasgow not Mumbai!

Regarding an accoutant we are using a small firm recommended by a friend who has tried several. I was told by several people that I MUST get Sage but our accountant said def. not necessary and showed me how he would recommend I set up my spreadsheets. So he has already saved me £100!! I would recommend using one for peace of mind and advice with what you can claim for.

markmc999

Another one here for Abbey.

They took a while to open the account but were really friendly, helpful and the account itself is brilliant - especially as its free!