Self Employed current account - Business?

kar999

Mrs Kar starting running a small dog walking business from home a couple of years ago and as such is technically self employed for tax etc. She's always used her old personal LLoyds Classic current account to bank any limited income. I've just converted it to a Vantage account to earn some interest.

I was going to open up two more classic vantage accounts in her name rather than mine as I pay 40% tax and we want to maximise our joint savings in a tax effecient way. The online application asks for a business name if you enter self employed. I concerned I will be opening business account and all that entails rather than personal current accounts.

Anyone any idea if I will fall foul if I carry on the applications. There are options for Homemaker or Not working - Independant Means. Neither of these require an employers details or business details.

It's only a small scale side-line operation rather than a full blown business and it's all declared as income to HMRC.

Consumerist

Even self-employed business people have personal current and savings accounts.

Given the situation you describe, you can legitimately describe Mrs Kar as a homemaker as this is probably her main occupation, anyway.

kar999

I'm inclined to agree. There is no legal HMRC requirement to have a seperate bank account, just a set of books, and I maintain her P&L and Income and Expenditure accounts for self assessment. Currently she is a non-tax payer hence the need to shovel most of our savings into her name to avoid my 40% top rate.

You wouldn't expect someone who ran Tupperware parties on the side.. (or are they Ann Summers parties nowadays? :shocked: ) as a minor income to set up a seperate current account.

If Lloyds dont like it I can always take our money elsewhere!

ChiefGrasscutter

If the amount of transactions through your bank account becomes excessive then Lloyds (or any other bank) may well take note declare it no longer being used for personal banking....and require you to open a business account instead........for which there will be charges I would imagine.

This is much the same way as those using personal/domestic broadband internet packages from their ISP's for what is actually a full scale business (and not just a one person/self employed etc) are also "invited" to instead pay for a business package. In these cases their inappropiate use comes to light when there is a fault and the customer demands instant rectification as "it's affecting their business". To which the inevitiable reply is...errr you are paying for a household package,not a business one, so you'll have to wait!

kar999

Totally agree for full blown business use but I spoke to the bank manager today who seemed quite relaxed about it and we converted her classic account into a Vantage and opened up 2 more new ones.