Limited Company & Business Bank Accounts

MysticGotenks

Hey everyone.

Hope you're all enduring the heat!

Quick one - I saw an advert for Monzo card and it got me thinking.

Do you need to have a BUSINESS account if you have a limited company?

By law you need a separate account to your personal current account, but couldn't one just open another current account with another bank (or Monzo etc) and use that as their 'business' account?

What's the benefit of having a business account over a current account if the above is true?

Thanks!

eskbanker

Most banks have clauses within their Ts & Cs that prohibit use of their personal accounts for business purposes....

Edit: Including Monzo, as per https://monzo.com/help/business-accounts/using-current-account-for-business:

Can I use my Monzo current account as a business account?

Unfortunately not.

Right now, you can only use your Monzo account as a personal current account.

When we set up business banking, you will be able to open a business banking account that will be specifically designed for business use.

N1ckS

Business accounts should in theory offer more features than a personal account such as invoicing, keeping track of expenses and helping with tax returns. Currently I'm trying out Coconut, but I should imagine Monzo, Tide etc all offer features over and above personal accounts, or at least are better suited to business banking and accounting:
https://getcoconut.com/2019/04/separate-your-business-expenses-from-your-personal-expenses/

MysticGotenks

eskbanker wrote: »

Most banks have clauses within their Ts & Cs that prohibit use of their personal accounts for business purposes....

Edit: Including Monzo, as per https://monzo.com/help/business-accounts/using-current-account-for-business:

Brilliant - thank you.

Apologies - I evidently could have just done a more thorough google search!

MysticGotenks

N1ckS wrote: »

Business accounts should in theory offer more features than a personal account such as invoicing, keeping track of expenses and helping with tax returns. Currently I'm trying out Coconut, but I should imagine Monzo, Tide etc all offer features over and above personal accounts, or at least are better suited to business banking and accounting:
https://getcoconut.com/2019/04/separate-your-business-expenses-from-your-personal-expenses/

I'll look into Coconut - after a quick browse it seems like one I'd be interested in - my current biz account offers me very little so I best have a scout round and make a change.

Thank you.

unforeseen

N1ckS wrote: »

Business accounts should in theory offer more features than a personal account such as invoicing, keeping track of expenses and helping with tax returns. Currently I'm trying out Coconut, but I should imagine Monzo, Tide etc all offer features over and above personal accounts, or at least are better suited to business banking and accounting:
https://getcoconut.com/2019/04/separate-your-business-expenses-from-your-personal-expenses/

Interesting. My business account has nothing more than a standard personal account (apart from charges)

N1ckS

Coconut seem to operate on a freemium model, the basic account is fine for me as invoicing is handled by a managing agent on my behalf:
https://getcoconut.com/pricing/

I've never used Tide or other services so can't really comment on which are most suitable. There are some aspects of the expense categorisation with Coconut that don't quite fit with my requirements but hopefully they may be addressed in future as they're relatively new.

There is a referral bonus for opening an account with no commitment. You can try it out and see if you like it.

Some features such as standing orders and scheduled payments aren't yet live:
https://trello.com/b/U0JQpdnQ/coconut-product-roadmap
https://getcoconut.com/blog/

jonesMUFCforever

To go back to post 1 - yes you need a business account especially for a limited company.

Owain_Moneysaver

MysticGotenks wrote: »

Do you need to have a BUSINESS account if you have a limited company?

The limited company needs a business account in its own name for its own money.

The company has a separate legal identity from you, and you can't use your bank account for someone else's money.

18cc

There is certainly no LEGAL requirement for you to sent up a bank account in the name of your limited company - you can use your personal account or any indeed any account - although that will almost certainly be against the T&C of the bank - however, not illegal.

As this article explains, if you do there may be tax and other ramifications though...

http://www.brighton-accountants.com/blog/company-bank-account/

jonesMUFCforever

18cc wrote: »

There is certainly no LEGAL requirement for you to sent up a bank account in the name of your limited company - you can use your personal account or any indeed any account - although that will almost certainly be against the T&C of the bank - however, not illegal.

As this article explains, if you do there may be tax and other ramifications though...

http://www.brighton-accountants.com/blog/company-bank-account/

Say you received a cheque in the name of the limited company how would you bank it?