UK Business Banking Help!

RickyZalman

I'm self-employed (SE) as an actor, and currently any earnings I make are paid into my personal current account. I have contemplated opening a business bank account for all my SE income to go to, but all my expenses towards my SE come out of my personal account. 

My expenses are significantly greater than income at the moment (thanks C****-19), so naturally my SE income won't pay for all my expenses. Therefore, I wondered if it's good practice to transfer any necessary funds from personal to banking account, so these expenses can be paid for by the business account? I'm a novice with regards to the legalities of business banking and don't want to break any kind of rules! Any advice would be gratefully received - thanks in advance. 

gm0

Separating your work transactions in a 2nd account makes a lot of sense so you can track it more easily and do your taxes.  If you are personally self employed then it's still your account and a personal loan or an overdraft if the cashflow is bouncy but the costs are ongoing.  What they will lend you - will limit this and what you need to fund the account with from other employment/benefits and what you can take out.  But the self employment and the accounts are still personal.

The situation differs with Ltds where there is more formality generally - accounts, PI, director loans, companies house and the restrictions on the company bank account being separate from "you" are more developed.

I don't know the entertainment market or countries you are aiming to work in and how it uses agencies/PAYE,  sole trader bills, cash in hand, paying Ltd companies carrying PI insurance.  The kind of self employed you are needs to match the practices of the market you are in.  As they evolve. The BBC used to be big on paying Ltds.  Now it is less keen. 

And then it's about costs, practicality, your effort vs monthly fees and all that.

My world would only work with Ltds and PI but now it's moving to tied agencies and PAYE (IR35)

Zanderman

RickyZalman said:

I'm self-employed (SE) as an actor, and currently any earnings I make are paid into my personal current account. I have contemplated opening a business bank account for all my SE income to go to, but all my expenses towards my SE come out of my personal account. 

My expenses are significantly greater than income at the moment (thanks C****-19), so naturally my SE income won't pay for all my expenses. Therefore, I wondered if it's good practice to transfer any necessary funds from personal to banking account, so these expenses can be paid for by the business account? I'm a novice with regards to the legalities of business banking and don't want to break any kind of rules! Any advice would be gratefully received - thanks in advance. 

I think you're over-thinking this. 

If your only expenses are things like clothes, fuel, hotel bills etc, then you can still make those out of your personal account, just the same as you'd do if you were employed.

And then, when you have income you pay those expenses back. You don't need to pre-load your business account with money to cover them. Pay them back as you need to.

Whether you actually need a business account - or perhaps just another personal account you use for business - is up to you.  You shouldn't use a personal account for business, as it breaks the bank's rules. 

But, if you only have outgoing personal expenses (i.e. you're not buying stock to sell or whatever) a personal account will do for outgoings.

And if your income is only form the jobs you do then there's no difference to wages being paid in - and those would be to a personal account.  So you may not need a business account for that either.

I do some 'acting' (merely supporting artist) work and just use my everyday personal account for that - it's not a big enough role (no pun intended) for me to open a special account.  But if it was I'd certainly open another account just to get things more separate. 

Not necessarily a business account, perhaps just an extra personal account - but I would consider a bus account from, say, Starling, as that is free of business charges and would avoid any worry about banking rules.

(I say all this despite strongly advocating business accounts for more complex business use!)