sole trader bank account

keaton

I plan on starting my own small sole trader business in the future,

I have opened a bank account just for the business in my name, this is a normal current account, that I opened solely for the business, yet today I was told that I need to open a 'sole trader business account' is this correct and have I wasted time in opening the current account?

phill99

The terms and conditions of Most personal current accounts restrict you from using it as a business account, so your bank are within their rights.

warwicktiger

Yes.
I just use a current account and have cheques payable to my name. Got away with no bank charges for 8 years!

keaton

Is there usually a charge for having a sole trader account?

CKhalvashi

keaton wrote: »

Is there usually a charge for having a sole trader account?

Yes.

I was paying something like £5 a month, plus a 3% cash charge, and I stopped driving taxis full-time about 7 years ago, so I'd be surprised if this has changed.

HSBC charge for our company accounts.

CK

trailingspouse

Most are free for the first year, and I believe some are now free for 2 years.

We pay £5.50 per month, no charges for electronic ins and outs., or for using the debit card. We would get charged for cheques, but hey, who uses them these days? We don't handle cash, so not an issue for us.

Another advantage to opening a business bank account (quite apart from avoiding any come-back from the bank for breaking their t&c's), is that you get access to their free business advice. It also means you can have your account in your business name, which is just more professional.

Put it another way - is saving £66 a year worth it? I wouldn't trust any advice from anyone who thinks it's good business practice to 'get away with it'. If they are showing a disregard to these rules, what other rules do they choose to disregard?

Savvy_Sue

keaton wrote: »

I plan on starting my own small sole trader business in the future,

I have opened a bank account just for the business in my name, this is a normal current account, that I opened solely for the business, yet today I was told that I need to open a 'sole trader business account' is this correct and have I wasted time in opening the current account?

Who told you? If it was the bank, then yes, you've wasted your time with them.

I think the question you have to ask yourself is, will this look like a biz or a personal a/c?

If you're going to be running a lot of transactions through it, it will not look like a personal account.

keaton

trailingspouse wrote: »

Most are free for the first year, and I believe some are now free for 2 years.

We pay £5.50 per month, no charges for electronic ins and outs., or for using the debit card. We would get charged for cheques, but hey, who uses them these days? We don't handle cash, so not an issue for us.

Another advantage to opening a business bank account (quite apart from avoiding any come-back from the bank for breaking their t&c's), is that you get access to their free business advice. It also means you can have your account in your business name, which is just more professional.

Put it another way - is saving £66 a year worth it? I wouldn't trust any advice from anyone who thinks it's good business practice to 'get away with it'. If they are showing a disregard to these rules, what other rules do they choose to disregard?

Thanks, can I ask what bank you use?

trailingspouse

We're with Barclays. It was free for the first year, and has been £5.50 per month for the last 2-3 years.

I'm not here to provide free advertising for Barclays (they're not perfect, but no worse than any other bank I've ever used!). We run a limited company with a consistent 6-figure turnover.

When we first opened the account it was free, of course, and we had access to free legal and accountancy advice which we found very useful. We have internet access and a debit card (we turned down their offer of a credit card), all our payments are via BACS including international incoming payments and these are all free. Cheques are extra, but I've only ever paid one in all the time we've had the business!! I'm guessing there would be a charge for cash payments in but we don't handle cash so that isn't an issue for us.

Hope this helps.

Aquamania

There's a link in the sticky above discussing best small business accounts

Savvy_Sue

Aquamania wrote: »

There's a link in the sticky above discussing best small business accounts

I'd start at the end and work backwards though, it was started some time ago.