Setting up a small business

radoslaff

Hi,


My wife has just set up a small online art shop. She has a regular job and this is to see how it goes. If everything goes well, she will make it her main job. So the question is does she need to set up a business bank account as well for the incomes and outgoings or can she use her personal current account with HSBC? It is not her main current account anyway. So far she has had a few sells via paypal and she has been paying the artists from her personal current account. I'm willing to give as much info as needed if somebody can give me a real advise what to do. Thanks.

xylophone

http://www.prowess.org.uk/set-up-business-today

HSBC may well insist on a business bank account.

Presumably she will also arrange a personal pension.

spadoosh

Im guessing she's not a Ltd company and as such shes not required to have a business account. Try and keep personla and business transactions seperate (ie on different accounts) purely for making self assessments that bit easier.

Have a look through the .gov and HMRC websites if youre not aware of the self assessment process and or guidelines. Will also cover all areas of HR and business you might not be aware of.

agrinnall

spadoosh wrote: »

Im guessing she's not a Ltd company and as such shes not required to have a business account.

Maybe not, but if the T&Cs of the personal account preclude it being used for business purposes then she can't use that account - in which case she may want to look for an account that doesn't have such restrictions.

spadoosh

agrinnall wrote: »

Maybe not, but if the T&Cs of the personal account preclude it being used for business purposes then she can't use that account - in which case she may want to look for an account that doesn't have such restrictions.

I wasnt prepared to look through the terms and conditions of HSBC's individual contracts to find that out. I just know it not a requirement for a business to have a business bank account.

And what would be the worst case on that? They try and recover the costs they woudve charged and close the account?

trailingspouse

If she's serious about making this her main source of income, then she needs to be doing things properly from the get go.

Business bank account - yes - T&Cs of most personal accounts preclude use for business. Most banks will give you at least one year's free business banking. It would be worth her while to shop around to find one that suits her. They will often also provide business advice for new businesses, which is always a good thing. Also, it makes things look more professional - if I was buying art, I would rather pay 'Mrs Radoslaff trading as Online Art' than just plain Mrs Radoslaff.

I would also seriously recommend that she speaks to an accountant, who will advise her of what records she needs to keep, whether she needs to think about registering for VAT, what sort of set up would be best for her (sole trader, limited company) and much much more.