Self Employed Business Acc missing from score

DannyVR46

It's very concerning if so.



I have heard before comments along the lines of "it's difficult to get on to the property ladder self employed" etc etc. Well now i understand why, the 7 years i have worked self employed are almost off the record as far as credit files/reports go.

BoGoF

To be fair though you chose to have all your bills paid through a business account.....as I said earlier it's not a good idea for many reasons.

davethorp

My business account doesn’t appear on my credit file

As far as self employed finding it harder to get on the property ladder and the like goes its more because income is not guaranteed and can be highly variable (or in my case highly seasonal). Not because of business accounts not being on personal credit files

Even if my business account was on my file all it would report is green zeroes or ok every month as there is no overdraft facility on it which wouldn’t really change my credit file too much as I have personal accounts that report that same information

DannyVR46

BoGoF wrote: »

To be fair though you chose to have all your bills paid through a business account.....as I said earlier it's not a good idea for many reasons.

Let me just copy and paste an excerpt from a quick google search for the term "do i need a business bank account self employed"

"If you’re working as a sole trader, then your personal and business affairs are treated as one for tax purposes. You are your business. So, in theory, you can use your personal bank account for business transactions, as long as your bank allows this.

In reality, most banks will insist that you open a separate account for your business, especially if you process a large number of transactions each month. Inevitably, you can expect to pay a monthly fee for the privilege."

My bank insisted and furthermore i was advised by the Princes Trust when planning my business that i would Need a business bank account. Actually it looks far more professional to customers to send payments to "My Business Name" rather than a bank account with my personal name.

It's surely not an unusual concept to have a business bank account.

If you're referring to the fact it is not good practice to have personal outgoings on a business account. I absolutely agree, again! I appreciate you took the time to reply and i thank you but perhaps you could elaborate. "To be fair though you chose to have all your bills paid through a business account. It's not good" isn't providing me much information and sort of misses the point...

However hands up, you got me! I am guilty of using my business bank account to pay for some personal outgoings, such as my lunch. I'm sure I'm not the only one and as far as tax purposes, all transactions are accounted for on xero appropriately. Personal outgoings are not accounted for as business expenses. I'm not doing anything wrong, just bad practice which i am changing.

In hindsight all business transactions should have been on one account and a wage sent to a personal account from the offset. Again agreed, as i said i only stumbled upon the credit report whilst organizing and researching best practices in this regard.

So this doesn't change my issue, my issue is not my lunch is missing from my credit score......

I actually have very few personal bills. I live with my parents and have sacrificed and worked relentlessly self employed since 2012. All i want to do now is get my finances organised, i want to be able to work towards being in a position to save for a deposit and apply for a mortgage.

My issues are as follows:

• My Self employed business bank account does not show on my credit file. Is this an error, can it be fixed or is it on a separate credit file related to my business (and if so, how do i access it).
• My bills which are nearly all business based again are not on my credit file (as above), such as water, electricity, landline, broadband, gas, rent (already answered as not something that shows on credit score, thank you Tarambor), mobile contract etc.

"If you’re working as a sole trader, then your personal and business affairs are treated as one"

DannyVR46

davethorp wrote: »

My business account doesn’t appear on my credit file

As far as self employed finding it harder to get on the property ladder and the like goes its more because income is not guaranteed and can be highly variable (or in my case highly seasonal). Not because of business accounts not being on personal credit files

Even if my business account was on my file all it would report is green zeroes or ok every month as there is no overdraft facility on it which wouldn’t really change my credit file too much as I have personal accounts that report that same information

Thank you Dave


Your business account isn't on file but do business accounts such as phones appear?

BoGoF

If the phone is in the name of the business then it's not going to appear on your credit file.

I may have misunderstood your previous posts but I thought you meant all your normal household bills were paid from your business account but it seems you have very little personal outgoings that would go on your credit file.

Your problem is a lack of personal credit history so you need to start building it now. Personal credit cards, mobile etc.

BoGoF

And re-reading your first post I think you misunderstand what a credit file is actually going to show. Nobodys file shows their income only details of credit agreements that are in your name.

System

DannyVR46 wrote: »

Let me just copy and paste an excerpt from a quick google search for the term "do i need a business bank account self employed"

You're misunderstanding the advice you read.

You need TWO accounts, one for the business, one personal one. You have everything to do with the business being paid in and being paid out of the business account, everything personal paid into and taken out of the personal account. Reason for this is twofold:

1) It makes controlling cashflow of the business easier - you don't end up funding a failing business from other money and thinking it is doing well because there's still money in the bank.
2) Should you be investigated by HMRC it is much easier to prove business spending.

It's surely not an unusual concept to have a business bank account.

But it is extremely unusual to use the business account as a personal account as well.

My issues are as follows:

• My Self employed business bank account does not show on my credit file. Is this an error, can it be fixed or is it on a separate credit file related to my business (and if so, how do i access it).

No it can't because your account is a business one and the bills are in the business name so won't be recorded under your name on CRAs.

[*]My bills which are nearly all business based again are not on my credit file (as above), such as water, electricity, landline, broadband, gas, rent (already answered as not something that shows on credit score, thank you Tarambor), mobile contract etc.

The above concerns me. You seem to be claiming PERSONAL bills against your business income which is tax fraud.

"If you’re working as a sole trader, then your personal and business affairs are treated as one"

They're not. I don't know where you read that but they're not. The only time it is is when it comes to your income for calculating tax. Any income from employment is lumped in with any income from business and then your tax is calculated. However personal bills MUST NOT IN ANY WAY SHAPE OR FORM be entered as a business expenses and treated as tax deductible because they're not. The only time they would be is if it was shared use, for example you use your phone for personal and business use and then you can claim the percentage of the cost that is equal to business use, i.e if you use it 25% personal, 75% business you can claim 75% of the cost as tax deductible.

Methinks you've been doing your accounting wrong and have seriously underpaid tax.

DannyVR46

Tarambor wrote: »

The above concerns me. You seem to be claiming PERSONAL bills against your business income which is tax fraud.

They're not. I don't know where you read that but they're not. The only time it is is when it comes to your income for calculating tax. Any income from employment is lumped in with any income from business and then your tax is calculated. However personal bills MUST NOT IN ANY WAY SHAPE OR FORM be entered as a business expenses and treated as tax deductible because they're not. The only time they would be is if it was shared use, for example you use your phone for personal and business use and then you can claim the percentage of the cost that is equal to business use, i.e if you use it 25% personal, 75% business you can claim 75% of the cost as tax deductible.

Methinks you've been doing your accounting wrong and have seriously underpaid tax.

That's a bold assumption "You seem to be claiming PERSONAL bills against your business income which is tax fraud", i'm sorry if that's how you read it but you are completely wrong.

I did not at any point say i was claiming personal expenses as business expenses for tax purposes. My query has zero relation to tax or claiming business expenses. I have no confusion when it comes to accounting, submitting tax returns and VAT returns and i am perfectly capable in this regard.


My query was about my "credit score".

xebruary

As others have suggested, your business current account will be being reported to the credit reference agencies under your business details and not your own. I would expect the same of the other agreements if they have been registered under the business.

Experian I know receive non-limited company reporting, and they have a paper form for making a statutory demand for your sole trader credit report:
https://www.experian.co.uk/assets/consumer/stat-report/Stat-credit-report-app-non-limited.pdf
Equifax and TransUnion I am not sure if they cover non-limited companies but looking through their credit report offerings for companies is the way to go.