Separate bank accounts for different businesses?

suzie_wong

Hi everyone,

I am a teacher that has just been made redundant as my school closed. In September I am going to become self-employed. I will have two completely different sources of income- one from private tuition, and one from a cosmetics company (party planning, along the lines of Tupperware etc).

I realise that I have to have a business account to keep my personal and business finances separate, but is it necessary for me to have separate accounts and books for the two businesses? Or as I am a sole trader can I lump it all into one?

Any help or advice would be gratefully received. Thank you.

Treading_Water

Hi Suzie
As a sole trader there is no legal need to keep a business bank account at all. You must keep all records of income and expense and be able to account for all income into your personal accounts, but unless you are considering a major business venture there is no need to run an expensive business account.
Most business accounts cost you money after the first year to 18 months unless you go with something like the FSB Co op business account. Which is guaranteed free as long as you stay in credit.

suzie_wong

Thanks, Treading Water. So it would be enough to have a single current account (which I have already set up ) and set of books for any income and outgoings concerned with both jobs? It will make it much easier if I can deal with it all together.

Savvy_Sue

I can't see why you shouldn't have it all going through one account, but when you're keeping your books you might want to keep separate analysis columns for the different bits to make sure that one isn't subsidising the other, IYSWIM.

suzie_wong

Yes, I hadn't thought of that. I think I'll keep the books separate (more for my own benefit in terms of keeping an eye on the two businesses) but use one bank account. Many thanks for pointing that out!