Becoming self employed UK - a few questions.. accounts? name?..

movie

I'm about to register as self-employed, i'll be selling items on ebay, I really don't expect to make much. I have a few questions, any help would be much appreciated:

1) I will not be registering a business name, as this is the case I realise that my name will be the 'business name'. Does this mean I will become searchable on say google as a registered business, do you automatically get publicly listed? Do sole traders\ self-employed individuals get listed EVERYWHERE?

2) I would prefer not to open a business account, and just add a new personal account, although it looks as though it may be necessary as the terms of most personal accounts forbid business activities. If I do open a bus acc, could I have it act as almost a 'flow through' account. i.e. all money earned will get payed into it, however only a portion of each payment will remain in that account, with the rest being transferred to my personal (which will be with the same bank).

3) Is it advisable to have a business account with a different bank then your personal? Wouldn't that be slightly pointless if i'm transferring a substantial part of every payment? Might my personal account then be seen as a business account?

4) Should I be remembering anything else important?

Thanks

edit:

Thanks to everyone who replied.. very helpful..

antrobus

(1) There is no public register of businesses in the UK, other than Companies House. Registering as self-employed with HMRC is purely a private matter between you and HMRC. However if you're in business, and trade and promote yourself online, of course your name will be plastered all over the internet anyway.

(2) That's correct, most banks don't like people using personal accounts for business purposes. Many people do however. Whether or not you could 'get away with it' in your particular circumstances I can't say. But if you do have a business account, you can do what you like with the money that gets paid in.

(3) I don't think it matters which bank you have your business accoutn with. Most people tend to open one with the same bank that they're already with simply because it's easier and less hassle.

keggsy

Hi There,

I have been self employed for just over 3 years.

I don't have a business account, just a basic bank account with HSBC. I didn't tell them that it was for business, I pay money into it and take money out at the end of the month. It makes doing my tax return so much easier to have all my "work" money seperate. No one at the bank have ever asked me if the account was for business.

With my money I pay myself around 75-80% of what I earn and transfer the rest into a high interest sving account and leave it for my tax payment.

Not meaning to sound patronising, your first tax payment is on account. So you have to pay tax for your first year of trading plus half of the next years expected tax. Just so it doesn't come unexpected. My first tax bill was £3.9K bit scary but all sorted now.

Hope this helps a bit, and good luck. being your own boss is great.

paddyrg

You can use almost whatever name you like and don't need to tell a soul beyond the tax man. However make sure the name doesn't mislead - Microsoft Domains Limited (if you are a sole trader) will just get you trouble ;-)

Bank - I have 2 company accounts with my own personal banking bank. It is actually an advantage as having a personal relationship with them means they can check your creditworthiness easily and may be helpful in other ways. For instance, I needed a new account for a new company at 4pm on Friday once - urgently, to receive a transfer the next week. I went in and my business manager put everything through on the spot, I left with an account number for the transfer, so got my cash weeks earlier than going in cold.

Most banks offer 18-24 months free business banking, then maybe a fiver a month account fee. It's worth it in my opinion for the first time someone sends you a cheque to your company name, or you need to set up an account with a supplier, etc. Far more credible to be able to issue company cheques too, it shows you're more kosher.

Whatever you do, though, keep perfect records of everything. Having a separate account makes this easier, you can check statements to see every penny in/out and it helps you keep your records in order.

Pennywise

I think it's worth reiterating the point about working towards a good relationship with your bank which may make it a good idea to have your personal and business bank accounts with the same bank. As mentioned already, it's good for a future decision maker at the bank to see how well you conduct your personal and business banking and for them to see at a glance how much money goes through the business which helps "prove" your earnings if you ever need a loan or mortgage with them etc.

For example, last year, I wanted a mortgage. I'm self employed and don't have an accountant (I am an accountant), so there was no-one to "sign off" my accounts or provide a reference. I expected difficulty getting a mortgage as the LTV was going to be high and it was a development job. I spoke to a couple of brokers who agreed it would be a challenge, but one suggested that I approach my own bank first (Halifax) based on me banking with them for decades, having my existing mortgage with them, having a Halifax credit card, etc. So I did, and was amazed when at the first meeting with the Halifax mortgage adviser, I was offered a mortgage without them even needing to see my accounts - he said it was because they had a full history of my finances and the "computer said yes" without question. I must say I didn't believe it and expected trouble further down the line, but in the end, they did provide my solicitor with confirmation of the mortgage - ready to go. That shows the benefit of building up a good relationship/history rather than shopping around!

Of course, others will have different experiences.

PlutoinCapricorn

Where your trading name is concerned, whether or not people can find you via Google depends on how much publicity and advertising there is, also on the rules for taking payments online if you have a website.

Consultants who trade under their own names and rely on personal contacts to get work can operate completely under the radar where public information is concerned if they want to. The rules for limited companies are different: I Googled my postcode and found that a lot of my neighbours are company directors for example.

It is also possible to operate under the radar and use your existing personal account for business provided that you only get the odd payment here and there and can easily identify all statement entries. A large volume of transactions/paying cash in is a bit of a giveaway!

Savvy_Sue

There's no 'one size fits all' solution to who you bank with. I'm going to put the downside of having both personal and business accounts with the same bank - this isn't to say it's not a good idea, but this can happen.

If the bank perceives that either a/c is 'in trouble', then it can decide to move money from one to the other without telling you - you've left £3000 in one because you've got a big bill to pay, then find it's not there any more. If it withdraws your overdraft, it might do so on both biz and personal accounts.

But - and here's a thought - suppose both your accounts are with RBS / NatWest / whichever the next bank to go into meltdown because of some glitch which should never happen, but just did ...

For that reason alone, I'd personally have accounts with different banks ...

Savvy_Sue

Having said that, you may find you struggle to open an account with the facilities you need, and if your own bank will give you an account and no-one else will, just remember you're not stuck with that decision for ever! Other banks may take a different view in a year or two.

Sugar_Coated_Owl

Hi, if someone has poor/bad credit and just has a basic bank account with Natwest is it likely they would allow you to have a business account?

Savvy_Sue

razorbladekisses wrote: »

Hi, if someone has poor/bad credit and just has a basic bank account with Natwest is it likely they would allow you to have a business account?

Do you have anything to lose by asking them?

Having said that, I think NatWest is one which has been mentioned as having a Foundation biz a/c, no credit, but useful for those with poor credit.

Sugar_Coated_Owl

Thanks Savvy_Sue