(very) small business bank account

longwalks1

I work full time and am a 40% tax payer, and looking to work for myslef on my days off (i work shifts so only work 13 days a month). I'm assuming i will need a small business bank account?


I'm not expecting to turn over much more than £5,000 a year, maybe less (probably working 1 day per week).


Will my ususal bank be suitable, Lloyds Bank and will i need ot produce anything to them when i apply?

00ec25

you have a choice

a) put everything through your personal account and hope the bank do not notice (unlikely they will given the sum you mention in the context of the size of your earned income)
or
b) open a business account and pay bank charges for the "privilege" once any "free" banking period ends.

trailingspouse

I would suggest it's not worth the hassle to not open a business bank account.

Free banking is for at least a year - but shop around as I'm sure I came across one not so long ago (Clydesdale??) that was offering 18 months. That's long enough for you to work out whether or not your business idea is worth the effort. We currently pay £6.50 a month to Barclays (actually £5.20 as we get a £1.30 'loyalty bonus' each month!) - granted all payments in and out are either electronic or debit card, we never handle cash and have only received one cheque in 8 years!! Charges are likely to be higher if you're paying cash in. If your business isn't making enough to cover £6.50 a month, then you need to rethink your business. Also, opening a business bank account often gives access to free business advice, which you might find useful.

J_B

We ran a holiday lettings business for 8 (?) years using a 'personal' Nat West account - it gave us a free £1K overdraft and no bank charges for the whole of the time.
We closed that business and last year we set up another similar business as a vat registered Ltd Co, so, we thought we ought to do the 'right thing' and take out a business account. We now have to pay 35p for every transaction and have no overdraft facilities.:(

crumblepie

I use Starling bank. All via an app, no fees, easy to set up.

Mistral001

If you do not have many business transactions going in and out of your personal account, then many banks will not insist that you open a separate bank account even if their terms and conditions do not allow it.

longwalks1

crumblepie wrote: »

I use Starling bank. All via an app, no fees, easy to set up.

Thanks all
So, once set up, all I do is provide the account sort code and account number for payment?

Would I set the Starling account up as in my name, or my proposed business name?

And finally (sorry for all the questions), to withdraw money I just pay my salary from the Starling account into my bank account?

Savvy_Sue

If you do go down the Ltd Company route (your other thread) then you MUST open a business bank account, in the name of the company, and you should take advice from your accountant about how much you transfer out of the business account into your personal one.

00ec25

J_B wrote: »

so, we thought we ought to do the 'right thing' and take out a business account. We now have to pay 35p for every transaction and have no overdraft facilities.:(

do you understand that a Ltd Co is a separate legal entity on its own? It is not your money, it is company money upon which no tax has yet been paid hence the need to segregate it from your own personal money.

"Thinking" could have ended you in trouble since a company MUST have its own money in its own name. That is the be all and end all of such a situation.

longwalks1

Savvy_Sue wrote: »

If you do go down the Ltd Company route (your other thread) then you MUST open a business bank account, in the name of the company, and you should take advice from your accountant about how much you transfer out of the business account into your personal one.

Thanks Sue, given your and 00ec25's replies, I think as a sole trader makes more sense, so going back to my original question on this thread I will open a 2nd personal bank account in my own name so its easier to do my self assessment for HMRC when it comes around. (I've posted a similar reply on my other thread btw)

J_B

00ec25 wrote: »

do you understand that a Ltd Co is a separate legal entity on its own?

Yes, certainly - why do you think otherwise

00ec25 wrote: »

It is not your money, it is company money upon which no tax has yet been paid hence the need to segregate it from your own personal money.

You don't know where the company borrowed it's money from in the first place, do you.
Maybe it has to pay it back ....

00ec25 wrote: »

"Thinking" could have ended you in trouble since a company MUST have its own money in its own name. That is the be all and end all of such a situation.

See above!