Do I need a business bank account?

latinaid

Zanderman said:

Indeed - apart from the product update info there's nothing new in the 'new' guidance - it's always been there on MSE - and there have been many many discussions about it on the forum before.  I'm still somewhat puzzled as to why it's seen as 'new' and why so many first time posters are welcoming it.  Where were they all before?!

I think it's because the weekly email had a link to the info on bank accounts and included the following: These are our first baby steps in what we hope will be a series of helpful self-employment guides, so please let us know in the forum if you found this guide helpful, if anything was missing, or any other topics you'd find it helpful for us to cover.  So people are responding to that.  Many people may not have been on the forum much before, so might not have known that there was already info there.

latinaid

eskbanker said:

Bizarre!

The article casually claims that:

You don't NEED a business bank account if...

• You're a sole trader or freelancer, or contracting (but not through a limited company), eg, hairdresser, research interviewer, journalist, TV producer, gardener, eg designer, developer

• You're doing gig work, like Uber, TaskRabbit or Deliveroo

but then later, in passing, correctly identifies a benefit of doing so:

PRO: You don't break your bank's terms and conditions. The reams of small print that comes with your personal bank account will usually say that you're not allowed to use it as a business account. This is especially relevant if you're a sole trader who'll have lot of cash and cheque transactions. If you're doing this through your personal account, it's likely your bank will close your account, or ask you to set up a business account with it. 

Seems a very mixed message to me - what's the point of prominently making a blanket assertion that there's no need to use a business account and then hiding a more realistic and accurate assessment within what MSE would claim to be 'small print'?

I agree that they didn't make it clear.  The first para you quote relates to the fact that legally a sole trader doesn't have to have a business bank account; the second relates to the T&C of banks.  Two separate things.

fiendishlyclever

eskbanker said:

fiendishlyclever said:

Nationwide told me it was fine to accept payments as a sole trader/contractor as long as I wasn't paying any employees or using my account to pay any business rates. Different providers will have different rules but it's worth asking based on your circumstances...

Did they put this in writing?  Their Ts & Cs seem pretty unambiguous, make no differentiation between types of businesses, and would presumably take precedence over any less formal assurances:

Business Use
14. The account is for personal use and it cannot be used for business purposes. 

Yes. I have the saved message. No issues in two years. 

docajac

Thanks for starting this long awaited thread.
I'm considering to start a Ltd Company and need some learning
Do business accounts also have £82k protection only?
Heard TSB gives the best deal for business accounts

J_B

docajac said:

Heard TSB gives the best deal for business accounts

Starling give free banking for businesses - is that a good enough deal?

dingling68

I have been trying to open a business account with Sterling Bank for the last few days and have found the whole experience frustrating so far. Who knew trying to explain doing something I have 33 years of experience in and how I generate business from it as additional income would be so stressful!!

Mistys_Dad

I just want to put an inaccuracy to rights: businesses are not taxed on their "Gross income", they are taxed on their profit.  If most businesses put away 30/40% of their gross income they would quickly run out of cash to operate.  To work out how much of your gross income to set aside for tax multiply your profit margin by your tax rate.  For example if your net profit margin is 10% and your tax rate is 40% you would need to put away 4% of your gross income.  As you will have a personal allowance you should have a bit of cash left over.  If you are self employed (as opposed to a limited company) don't forget you will also need to put some money aside for National Insurance as well as tax.  If you are a limited company the current rate of Corporation Tax is 19%.

Beanie79

Has anyone looked at or is using a MOBILE BANK such as Bunq which is claiming to revolutionise banking. It sounds amazing and in my brief knowledge of this particular one it has multiple sub-accounts for segmenting your money to help you budget - this is surely what us self-employed people need as opposed to a Business account or any additional accounts that charge a considerable amount? (Bunq itself is not free, I think it's £96 per year/£8 per month) but what it offers far outweighs what a traditional Biz Ac here offers. ...Each sub-account has it's OWN account number too and you can have as many as you want. Anyone have any experience with this, or others?

siobeau63

i need to open a business account for an LLP, however I live in the UK and my partner lives in Europe. can anyone advise please?

jonesMUFCforever

siobeau63 said:

i need to open a business account for an LLP, however I live in the UK and my partner lives in Europe. can anyone advise please?

IMO it will be nearly impossible to do what you want with a high street bank. Any chance  (when banks have reopened) that you could both attend an interview - also what country is the partner from and is all monies that will be paid into LLP from that particular country?
For example any monies coming in from say Russia to say Italy then across to your account in UK? If so there will be no chance of them opening an account for you.
What business are you in?