Can I use a basic bank account for business?

Tryingtogetsorted

Hi - I opened a basic bank account last year when I got into financial difficulties, and I wanted to manage what income I'd got coming in without my regular bank taking all the money. This has worked quite well and I'm very happy with the account.

This year I find myself unemployed again and am going through the government New Enterprise scheme to go self-employed and set up a business. I want to keep business and personal finances separate even though I won't have a great deal coming in. Ideally I'd like to open another basic business account (preferably with the same bank). Does anyone know if there's any reason why I couldn't do that? If you've gone through the New Enterprise scheme, how did you deal with your finances?

Any advice would be appreciated.

EarthBoy

Tryingtogetsorted wrote: »

Does anyone know if there's any reason why I couldn't do that?

It's almost certainly against the terms and conditions of your account to use it for business purposes. Banks don't like you using regular current accounts for a business, let alone a basic bank account. This is because the majority of business accounts impose fees, whilst personal accounts usually don't (and basic accounts certainly don't) and the banks won't allow you to get something free if you should be paying for it.

If you have very few transactions going through your account the bank might not notice, so you might get away with it, but if they suspect you're using your account for business purposes they will probably close it down.

Even if you can get away with it you'll probably have to open your new account at a different bank. Basic accounts are supposed to be a fall back option for people who can't get any other account, so I would be surprised if any bank will let you have two basic accounts.

jonesMUFCforever

One of the easiest giveaways is to have your NI contributions paid by D/D through the account - they will have you bang to rights.

Tryingtogetsorted

Thanks for the advice. I'm not going to have a huge amount of transactions, mostly money coming in and very little going out, so I don't think a business account is justified. I'm basically going self-employed. Do you think that would make a difference?

InsideInsurance

Tryingtogetsorted wrote: »

Thanks for the advice. I'm not going to have a huge amount of transactions, mostly money coming in and very little going out, so I don't think a business account is justified. I'm basically going self-employed. Do you think that would make a difference?

To the bank? No

To the chances of being caught if you did try and use a personal account for business activity? Yes

Ultimately its up to you to decide if you want to run the risk of them closing your account or trying to charge you fees retrospectively etc.

There are accounts like the Natwest Foundation Business Account which is for those with poor credit histories etc but it attracts a monthly fee as per most business bank accounts.