Business Bank Account

yoshiyella

Dear All,

I couldn't see a Business Bank Account section so thought this would be the best place.

I need a business bank account - I have no idea how much money I will make from the business; more of a hobby then anything else. However, I want to play everything by the book.

Which bank account would be suited to me? It is a small hobby and will probably make only £1200 a year.

Thanks, Simon

Kim_13

This MSE article for small business has a section on some of the best free business banking available: https://www.moneysavingexpert.com/banking/small-business#acc

It may be that you can switch elsewhere when a free period expires to continue getting free business banking. I would also advise using comparison sites to see what else is out there.

CSMR

For such a small amount of money it would be a mistake to set up a business. The costs of maintaining the business (accounting fees, bank fees) will eat up most of your profit, or if you try to do the accounting yourself, waste a lot of your time.

Instead I would operate as a sole trader.

yoshiyella

CSMR wrote: »

For such a small amount of money it would be a mistake to set up a business. The costs of maintaining the business (accounting fees, bank fees) will eat up most of your profit, or if you try to do the accounting yourself, waste a lot of your time.

Instead I would operate as a sole trader.

Thank you - I am not looking to make a profit, just break even.
If after the free banking period is up I am not making money then I will stop offering the service.

However, although I think it may only make a small amount of money you just never know and it may be well and truly successful so preparation is paramount.

Camster

I would give it a go if I were you. You never know if your business could do better than you expect.

I set up a very small online business about 12 years ago with the view to seeing what happens, and my sales were over £10,000 within the first six months. Not massive I know, but OK for a part time start up business.

Online business in particular can be set up very cheaply these days, so provided you don't have a lot of start up costs I would give it a go.

jonesMUFCforever

Most banks will give free banking for xx months to new businesses - this should give you time to see whether you can make a go of it.
If you do have to pay any bank charges they are all tax deductible.

Zanderman

CSMR wrote: »

For such a small amount of money it would be a mistake to set up a business. The costs of maintaining the business (accounting fees, bank fees) will eat up most of your profit, or if you try to do the accounting yourself, waste a lot of your time.

Instead I would operate as a sole trader.

A sole trader is a business. Doesn't matter if you're a sole trader, partnership, limited company or whatever, you're still running a business.

Accounting fees are irrelevant to the OP's question and, if the business is small, will be negligible or non-existent. I've run many successful (but small) businesses and have never had any accounting fees! Neither have I spent too much time doing accounts!.

And banking fees are also negligible on start-up particularly with some of the longer start-up deals. Just have a look at the various offers and go with one.

trailingspouse

CSMR wrote: »

For such a small amount of money it would be a mistake to set up a business. The costs of maintaining the business (accounting fees, bank fees) will eat up most of your profit, or if you try to do the accounting yourself, waste a lot of your time.

Instead I would operate as a sole trader.

Even as a sole trader, you still need a separate business bank account. It's against the terms and conditions of most personal bank accounts to use them for business purposes. Most banks allow at least a year of free banking.

CSMR

Ah OK. I was not saying don't actually do business, just don't set up a limited company and instead operate as a sole trader. Did not know that a sole trader also needs a business bank account.

Aquamania

yoshiyella wrote: »

Dear All,

I couldn't see a Business Bank Account section so thought this would be the best place.

I need a business bank account - I have no idea how much money I will make from the business; more of a hobby then anything else. However, I want to play everything by the book.

Which bank account would be suited to me? It is a small hobby and will probably make only £1200 a year.

Thanks, Simon

yoshiyella wrote: »

Thank you - I am not looking to make a profit, just break even.
If after the free banking period is up I am not making money then I will stop offering the service.

However, although I think it may only make a small amount of money you just never know and it may be well and truly successful so preparation is paramount.

So what are your plans precisely???

A profitable business, or just a hobby (where you only plan to break even)?

You will only require a business account if you plan to run a business

yoshiyella

Aquamania wrote: »

So what are your plans precisely???

A profitable business, or just a hobby (where you only plan to break even)?

You will only require a business account if you plan to run a business

My wild optimism says making £1200. My head says break even.

It is a hobby, nothing more. It requires a business account as I will be selling thus making money.