Moving money from business to savings account [Merged]

superkick40

Hi all

Unsure if this is the right place to post please feel free to delete. I am classed as a soletrader - running a sidelone alongside my employed work. Have been running it since December and just letting the money accumulate in the bank not a lot but around 2k. Is there any reason I can’t move this money into a savings account to earn the interest from it? From what I can see there is no legal/tax reason I can’t but wanted to check. Also would this be OK being deposited into my personal savings account or should I set up a seperate account for deposits from my business?

superkick40

Hi all

Unsure if this is the right place to post please feel free to delete. I am classed as a soletrader - running a sidelone alongside my employed work. Have been running it since December and just letting the money accumulate in the bank not a lot but around 2k. Is there any reason I can’t move this money into a savings account to earn the interest from it? From what I can see there is no legal/tax reason I can’t but wanted to check. Also would this be OK being deposited into my personal savings account or should I set up a seperate account for deposits from my business?

superkick40

Hi all

Unsure if this is the right place to post please feel free to delete. I am classed as a soletrader - running a sideline alongside my employed work. Have been running it since December and just letting the money accumulate in the bank not a lot but around 2k. Is there any reason I can’t move this money into a savings account to earn the interest from it? From what I can see there is no legal/tax reason I can’t but wanted to check. Also would this be OK being deposited into my personal savings account or should I set up a seperate account for deposits from my business?

DE_612183

when you say you've let it accumulate - is this is a business account?

superkick40

Yes paid into my business bank account

sheramber

Duplicate post in banking and budgeting forum.

pramsay13

No reason you can't move your business money to personal savings as it's all your money anyway. 
You can open a business savings account if you want but no particular need to. 

superkick40

sheramber said:

Duplicate post in banking and budgeting forum.

Sorry didnt know the best place to post. As said happy for any in the wrong place to be deleted

DullGreyGuy

superkick40 said:

Hi all

Unsure if this is the right place to post please feel free to delete. I am classed as a soletrader - running a sideline alongside my employed work. Have been running it since December and just letting the money accumulate in the bank not a lot but around 2k. Is there any reason I can’t move this money into a savings account to earn the interest from it? From what I can see there is no legal/tax reason I can’t but wanted to check. Also would this be OK being deposited into my personal savings account or should I set up a seperate account for deposits from my business?

As a sole trader there is no legal distinction between you and the business and so you can put money into wherever you like. Banks will often prohibit you using your current account for business but thats a contractual thing not a legal requirement, that said business accounts can have some benefits like being able to accept payment made out to your trading style. 

Its very different if you were to incorporate as firstly that creates a new legal person and secondly your personal tax and the companies tax are seperate so if the limited company retains the money and doesnt pay you then you arent paying personal tax on it. No such idea with Sole Traders, you make £500k profit in a year, you'll pay personal tax on the £500k (less any pension contributions etc)

dunstonh

. Is there any reason I can’t move this money into a savings account to earn the interest from it? 

No.   As a sole trader it isn't an issue.  Even as a limited company, you could get away with it if you were 100% shareholding director but it gets messier on the audit trail.  No issue with the sole trader status though.

Bookworm225

It is fundamental to being a sole trader that there is only YOU, there is no "business" and "you", there is only YOU

as far as HMRC are concerned all money is yours no matter what the bank call the account it sits in.
Banks may "force" you to open a business name account (so they can charge you for it) but all activity on it, and any other account, is YOU not your business name as the latter does not exist for tax purposes.


if you are not up to speed with this fundamental aspect yet, then please take extra care with your tax return