Business Accounts

Alex92_2

Hello,

I have been told by numerous people with regards to business accounts that it is best to have two. One to have your income come in from and then take 40% of this each month and put it into another account for outgoings (Rent, internet, electricity, tax, vat, paye etc).

Which is a good bank to use for business? I use Lloyds and HSBC for personal and currently using Natwest for business. As they dont really offer interest rates, should the only decision maker in this process really be, how accessible it is, how good the user interface is and simplicity of it and other bits like mobile banking, account renaming etc? Or is there more to it?

Forgive my newbieness. I am still new to this side of things.

phill99

I've only ever had 1 business account. Can't see the benefit of having 2. I just transfer a sum each month from my business account to my personal account for my non business expenses - mortgage, council tax, home insurance, food eye. The rest stays in the business account and all business associated costs are paid from it.

Alex92_2

phill99 wrote: »

I've only ever had 1 business account. Can't see the benefit of having 2. I just transfer a sum each month from my business account to my personal account for my non business expenses - mortgage, council tax, home insurance, food eye. The rest stays in the business account and all business associated costs are paid from it.

I guess it depends on just how many incomings/outcomings you have. Most people I know with successful and larger companies tend to tuck away 40% into another account each month for Taxes and another for personal savings.

GlamGirlie

I would recommend you have a business current a/c and a business savings a/c, that way you can put aside money each month (or each invoice, etc) for tax & VAT.

Your accountant will advise you how much you can take out of the business each month as salary/dividends, so set this up as a standing order to your personal account.

Your accountant should allow for outgoings such as business rent etc, before telling you how much you can draw.... if he/she doesn't, you need to change to a better accountant!

longtimelurkersam

I have x2 business current accounts and x2 business savings accounts all with NatWest.

X1 business account receives my payments into it as a contractor. I transfer X amount each month to pay for my fixed business expenses (rent for my flat and council tax) and then I transfer ALL the VAT that I have incurred into a separate VAT account. I need to get better at transferring an amount for corporation tax liabilities to the other savings account but my accountancy did a great job this year so CT is not that high. I’ve had my personal accounts like this since I was a youngster as always spent the money forgetting bills had to come out…..oops

LTSB business accounts do not currently offer a decent mobile functionality and in fact the regular business account requires card and reader to log on and transact at a computer. I am with NatWest for personal accounts and my business, I can access it all from my iPhone and easily just move money around as I wish, you only use a card and reader when you wish to set up new payees which must be done online as opposed to on the phone, oh and you must make the first payment from computer as opposed to phone. Most are giving free banking for some period, but you would be classed as a switcher so it is unlikely to be 18 months like they have been offering. Cannot comment on HSBC.

Alex92_2

Thanks for the pointers guys!