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Starting a small business - Bank account advice needed

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  • lazer
    lazer Posts: 3,402 Forumite
    Atidi wrote: »
    The reason for starting a business should only be based on a realistic & viable business plan ... IMO :money:

    In an ideal world yes - but it's not an ideal world

    If you have no work and someone asks if you do a bit of x, y or z for them - then that makes you self employed as you have to be to pay tax on the income.

    You are not an employee as it is generally just individual home owners asking for something small done, so you are self employed and therefore have started a business.

    OR should you turn down the work because you don't have a business plan or alternatively not declare the income?

    the £20 is better in your pocket than someone elses - and since the only benefit my husband would be entitled to is 6 months JSA - then he has little to lose.
    Weight loss challenge, lose 15lb in 6 weeks before Christmas.
  • Wywth
    Wywth Posts: 5,079 Forumite
    edited 14 June 2013 at 12:06PM
    lazer wrote: »
    In an ideal world yes - but it's not an ideal world

    If you have no work and someone asks if you do a bit of x, y or z for them - then that makes you self employed as you have to be to pay tax on the income.

    You are not an employee as it is generally just individual home owners asking for something small done, so you are self employed and therefore have started a business.

    OR should you turn down the work because you don't have a business plan or alternatively not declare the income?

    the £20 is better in your pocket than someone elses - and since the only benefit my husband would be entitled to is 6 months JSA - then he has little to lose.

    I think you are in real danger of making a mountain out of a mole hill here ;)

    Check out hobby business on Google (although I would have thought you'd have known this as you are an accountant)

    Banks won't care if someone deposits the odd £20 they make on side into their personal account.

    According to HMRC:
    It is unlikely that hobbies which involve a person making minimal supplies are business. However, in some cases the person’s hobby can lead them to make substantial supplies and may grow to become a business activity. Many successful businesses grow out of a hobby or private interest.

    Check out here for some more examples by HMRC as to what is and isn't considered a commercial business
    http://www.hmrc.gov.uk/guidance/selling/examples.htm

    I would fully expect a bank to follow a very similar pattern in deciding if something was a business or not.

    Edit: More information from HMRC about legal precidents that have been established as to what is and what isn't a commercial business can be found here:
    http://www.hmrc.gov.uk/manuals/bimmanual/bim75705.htm
  • lazer
    lazer Posts: 3,402 Forumite
    It's not about the bank not caring - its that we want a business account as the business is operating with a trading as name, and despite the invoices makes cheques payable to Firstname Surname, the customers are still making them payable to the T/A name.

    His bank have already confirmed they are happy for the account to be used but won't open a business account so we can therefore use the T/A name (without a business plan)

    It looks unprofessional having to phone customers asking for the cheque to be re-issued.
    Weight loss challenge, lose 15lb in 6 weeks before Christmas.
  • Wywth
    Wywth Posts: 5,079 Forumite
    edited 14 June 2013 at 1:30PM
    lazer wrote: »
    It's not about the bank not caring - its that we want a business account as the business is operating with a trading as name, and despite the invoices makes cheques payable to Firstname Surname, the customers are still making them payable to the T/A name.

    His bank have already confirmed they are happy for the account to be used but won't open a business account so we can therefore use the T/A name (without a business plan)

    It looks unprofessional having to phone customers asking for the cheque to be re-issued.

    Make your mind up.

    I thought you said it was about your hubby making £20 on the side when "someone asks if you do a bit of x, y or z for them".

    Now you are talking about him wanting to portray a "professional image".

    What do you think his bank would think of his "professional image" when asked to produce a business plan for his new business venture when he never bothered to create one? :huh:

    Most large construction firms don't care about fancy trading names of their CIS contractors - they just want to see evidence of good, honest work.
  • I felt exactly the same as I have many missed payments on my credit report.

    I can't obtain credit cards or store cards with major banks, except my own bank.

    I went to my own bank and they gave me a business account with no issues.

    At the time I was also on a DM Plan and couldn't afford to repay my credit card with the same bank (Halifax/ Lloyds)

    P.S - I didn't take anything with me or do anything, no business plan or anything as I was already running the business - they didn't ask for any evidence or accounts. HTH
  • dertin03
    dertin03 Posts: 17 Forumite
    Business accounts are usually easy to set up. I'd recommend Barclays as its free for the first two years.
  • lazer
    lazer Posts: 3,402 Forumite
    Wywth wrote: »
    Make your mind up.

    I thought you said it was about your hubby making £20 on the side when "someone asks if you do a bit of x, y or z for them".

    Now you are talking about him wanting to portray a "professional image".

    What do you think his bank would think of his "professional image" when asked to produce a business plan for his new business venture when he never bothered to create one? :huh:

    Most large construction firms don't care about fancy trading names of their CIS contractors - they just want to see evidence of good, honest work.

    The jobs he does for the CIS contractors don't need the trading name the other smaller jobs do.

    Its not really earning £20 on the side - its the only earnings he has, and everyone has to start small but dealing with even local shops etc the trading name looks more professional, and hopefully the business will develop.
    Weight loss challenge, lose 15lb in 6 weeks before Christmas.
  • Brassedoff
    Brassedoff Posts: 1,217 Forumite
    Wywth wrote: »
    If he really is self employed, he really should have produced a business plan (simple as it may be) before embarking on such a venture.

    You know, as someone who produces the basic Sage Win Forcast right to the £20K 200 page jobbies, I am amazed at the amount of new business people who do not prepare any sort of plan when they start. It's usually the same ones who fail.

    I tour some of the BNI's and it never fails to amaze me just how many people have no plan, no even an A4 sheet with some form of direction.

    Never mind. Fail to plan, plan to fail and all that gumpf.
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