Sole trader account vs Business account vs Personal Current Account || Self-employed

Concious_Entrepreneur

Hey folks, hope you are doing well.

I am writing this post regarding the most suitable type of bank account for a sole trader who
is running a small creative business (brand identities, logotypes, explainer videos etc.)

I had read on HMRC forums that is not obligatory for a sole trader to have a separate bank account for business operations. However, by doing so, we could significantly easier to manage in and outs connected with the company.
MY first thought was to open a different personal current account, but I heard on some forums that banks could even freeze the bank account if they will realise that it has too many monthly operations.

So then only Sole trader Account or Business account stay in a game. Which one will be the most suitable for such a company?
Do you know any interesting deals wort to consider in 2020?

Currently, I have got a Barclays bank account.

Thank you so much for any support you can give and I appreciate your time.

Kind regards,
Peter

oldbikebloke

you are a sole trader, not a company, you have a business not a company 

there is no right ot wrong answer to your question. As you know there is a risk in not using business account if the bank spots it and gets awkward, after all they are in business to take a slice of the action from those who are themselves in business. 

compare the business accounts across the various banks, most will have an initial free banking offer, thereafter it comes down to do you need to visits a branch, are you going to pay in cash and cheques or will you be mostly online banking .

it is without doubt much easier to administer and cleaner for accounts purposes to have a separation between your sole trader account and your personal account. That said, are you disciplined enough not to mix the two up anyway, seen that many times with clients who simply spend from the account with the biggest balance at the time they need to spend 

djp64

I use Starling bank for mine - free and easy to operate via your phone : )

Debbie

cedrag

Concious_Entrepreneur said:

Hey folks, hope you are doing well.

I am writing this post regarding the most suitable type of bank account for a sole trader who
is running a small creative business (brand identities, logotypes, explainer videos etc.)

I had read on HMRC forums that is not obligatory for a sole trader to have a separate bank account for business operations. However, by doing so, we could significantly easier to manage in and outs connected with the company.
MY first thought was to open a different personal current account, but I heard on some forums that banks could even freeze the bank account if they will realise that it has too many monthly operations.

So then only Sole trader Account or Business account stay in a game. Which one will be the most suitable for such a company?
Do you know any interesting deals wort to consider in 2020?

Currently, I have got a Barclays bank account.

Thank you so much for any support you can give and I appreciate your time.

Kind regards,
Peter

https://forums.moneysavingexpert.com/discussion/2103019/small-business-bank-accounts-discussion-area

Concious_Entrepreneur

Hello guys, hope you are doing well,
Thank you for your incredible support:
oldbikebloke - helpful as always. Indeed it is vital to have a separate account for business only.  
djp64- thank you, Debbie, as well. I will check it for sure.
cedrag - this link is useful. My next enquires I will post over there.
Kind Regards,
Peter

J_B

djp64 said:

I use Starling bank for mine - free and easy to operate via your phone : )

I concur - it was a pig to open (Ltd Co with 2 equal shareholders) but it works a treat now.

We had a Nat West business a/c first but once the initial 'free' service ran out they wanted to charge 35p (?) for every transaction.

Concious_Entrepreneur

Hello J_B,
thank you for your advice. Indeed, this flat rate of 35p could make a difference, especially, if you 've got a large quantity of low-value transactions. May I ask you one more question regards to this business bank account, please? 
Are they charging something extra than 35p? Do they have limit value fo single transaction, where above this amount if the money they will charge more than 35p? I am just curious. Unfortunately, I couldn't find any information on their webpage about this.
Have a great night.
Kind regards,
Peter

cedrag

Concious_Entrepreneur said:

Hello J_B,
thank you for your advice. Indeed, this flat rate of 35p could make a difference, especially, if you 've got a large quantity of low-value transactions. May I ask you one more question regards to this business bank account, please? 
Are they charging something extra than 35p? Do they have limit value fo single transaction, where above this amount if the money they will charge more than 35p? I am just curious. Unfortunately, I couldn't find any information on their webpage about this.
Have a great night.
Kind regards,
Peter

There's no limit to the value of transactions at least that would affect a typical small business.
(there may be in the small print limits typical of most bank accounts, such as amount of cash you may withdraw per day via an ATM, etc)

In simple terms it's 35p for automated transactions, 70p for manual transactions (e.g. payment by cheque, paying in over the counter, etc) and 70p per £100 for cash.

I'm not sure why you could not find these details yourself, as I found them very easily from their website:
https://www.business.natwest.com/business/bank-accounts.html

More details of their standard charges here:
https://www.business.natwest.com/content/dam/natwest/business/current-accounts/documents/nw-bus-current-account-charges.pdf