First Time Landloard - Seperate Bank Account?

gazfocus

We are due to complete on our new house on Friday and will then be getting work done in our current house in preparation for it being rented out.

The tenants have already paid the deposit and first months rent and are due to move in on 1st April, however, we are going to spend approx £2,000 on improvements to the house (new flooring in living room, re-plaster ceiling, decorating, etc), plus the fee for protecting tenants deposit, landlord insurance, etc.

So, with tax in mind, is it worth getting another bank account set up to use for the rental 'business'? If this rental goes well, we will be considering buying further rental properties as and when we have funds available to do so, so if it's worth getting another bank account should we set up a business account or just a normal personal one?

pcgtron

With 1 rental property I wouldn't have another bank account just for that but if it makes you feel better having it seperately, then no harm can come from it.
Makes no difference really.

BitterAndTwisted

It's not necessary if you're any good at record-keeping. If you'd be happier about keeping income and expenditure completely separate from your personal transactions I doubt you'd be able to run it on a business bank-account as you're not strictly registered as a business. It's my understanding that business bank-accounts attract higher charges but the only way to find out is to chat to your bank.

gazfocus

pcgtron wrote: »

With 1 rental property I wouldn't have another bank account just for that but if it makes you feel better having it seperately, then no harm can come from it.
Makes no difference really.

Thanks, I was just thinking it would make things easier to trace back with regards to tax returns (i.e. I could put x amount in that account and that could cover the improvements and expenses that I'd like to claim back against tax).

jjlandlord

It's not the number of properties, it's organisation, record-keeping and separation of business and personal finances.

It costs you nothing to open a personal bank account, so the question is really why wouldn't you?

gazfocus

BitterAndTwisted wrote: »

It's not necessary if you're any good at record-keeping. If you'd be happier about keeping income and expenditure completely separate from your personal transactions I doubt you'd be able to run it on a business bank-account as you're not strictly registered as a business. It's my understanding that business bank-accounts attract higher charges but the only way to find out is to chat to your bank.

Thanks. I'm aware that business accounts come with fees but you don't need to 'register' as a business as far as I know (I was a sole trader before moving to a ltd co) but will definitely talk to my bank.

gazfocus

jjlandlord wrote: »

It's not the number of properties, it's organisation, record-keeping and separation of business and personal finances.

It costs you nothing to open a personal bank account, so the question is really why wouldn't you?

So would you go for a personal account over a business one?

jjlandlord

gazfocus wrote: »

So would you go for a personal account over a business one?

Yes, I would just open a new personal account.
At one point if the bank detects that they would like it to be a business account, I'm sure they'll be in touch quick enough