New bank account info

toozie_2

My hubby will be becoming a Sole Trader in March. At present we have a joint account (where his wages at present go) and I have an account in my name. We don't want to close either of them, but we are looking at opening a new personal current accountt in my husbands name to keep his income & expenditure seperate- so it would only really be used for credits from possibly one single company, and his travelling expenses and phone and possibly stationary purchases - so we keep things as simple as possible- then he'll transfer a monthly amount to the joint account for houshold (personal) bills etc.
We've looked at Virgin for possibly the best account with interest (he won't need to want to go overdrawn- he won't be purchasing goods) are there any incentives out there for opening a new account without switching? Thank you 

BrownTrout

For a sole trader open a monzo or starling account. Easy. Avoid using a personal account !

toozie_2

BrownTrout said:

For a sole trader open a monzo or starling account. Easy. Avoid using a personal account !
Thank you. What are the main reasons why you'd say this? Sorry we are new to this, so I apologise for sounding a bit stupid, hubby has worked for a company for 40+ years and will now become self employed with regard to his "services" after April. He'll be invoicing a company (maybe two) for his services, and the main outgoings will be fuel & associated costs, a mobile and some stationary.

BrownTrout

I say this because monzo and starling for example a doddle to open and run.

colsten

It is against the T&Cs of all personal current accounts to use them for business purposes.

A sole trader should get a sole trader account. Starling do one free of charge, Monzo have a free-of-charge Lite version of their business account, other banks offer them free of charge for 12 months and then levy a monthly charge.

jsmith9

I would recommend opening your business account at a different banking group from your personal account (s)

toozie_2

colsten said:

It is against the T&Cs of all personal current accounts to use them for business purposes.

A sole trader should get a sole trader account. Starling do one free of charge, Monzo have a free-of-charge Lite version of their business account, other banks offer them free of charge for 12 months and then levy a monthly charge.
I have read in serveral places (including this site)  that there is no requirement by law to have a business bank account as a sole trader- but it is required to keep transactions seperate- hence opening another bank account now (whilst he is employed) with a different insitution

colsten

toozie_2 said:

I have read in serveral places (including this site)  that there is no requirement by law to have a business bank account as a sole trader- but it is required to keep transactions seperate- hence opening another bank account now (whilst he is employed) with a different insitution

Of course there is no law which demands the division of personal and business accounts but 

1. it makes eminent sense to split them
2. it breaches the T&Cs of personal current accounts to use them for business purposes
3. it is pretty irresponsible to encourage people to breach the T&Cs they agreed to

It's funny, isn't it, that those who pooh-pooh the idea that a business needs a business account are nowhere to be seen when people come here crying because their (often only) current account got closed for breach of T&Cs.

It's not even onerous to get a sole trader account so I am not sure why there is even a debate.

Eco_Miser

toozie_2 said:

I have read in serveral places (including this site)  that there is no requirement by law to have a business bank account as a sole trader- but it is required to keep transactions seperate- hence opening another bank account now (whilst he is employed) with a different insitution

There's no legal requirement, but the banks object to customers using the personal accounts, for which the banks make no explicit charge, for business purposes, with the possibility of numerous small incoming payments and subsequent charge-backs. They tend to close such accounts, and any other accounts the business person has with them, and refuse to do business with them ever again.  So it's generally not worth risking.

On another subject, if your hubby will have only one client, will HMRC believe he's not an employee, especially if he doesn't even have a business bank account?

Zanderman

toozie_2 said:

I have read in serveral places (including this site)  that there is no requirement by law to have a business bank account as a sole trader- but it is required to keep transactions seperate- hence opening another bank account now (whilst he is employed) with a different insitution

You're quoting legalities - which are government rules. 
But what you need to worry about are bank account terms and conditions - which are bank rules.
Not the same thing at all. 

IanManc

Zanderman said:

You're quoting legalities - which are government rules. 
But what you need to worry about are bank account terms and conditions - which are bank rules.
Not the same thing at all. 

And the bank's terms and conditions are what you agree to when you open the account - you agree to keep to them when you enter into the contract you have with the bank and you are bound by the terms and conditions just as the bank is.