Do I need a business account?

[HairbyTor]

Hi, I'm off into the scary world of self employed and going freelance. Do I need a business account or is a current account ok? What does everyone else use?

 

[AcidPerm]

Most business bank accounts attract charges so you could just use a savings account for now until you really need one. The most important thing in the early days is to keep accurate records of all your income and expenditure.

 

[HairbyTor]

Most business bank accounts attract charges so you could just use a savings account for now until you really need one. The most important thing in the early days is to keep accurate records of all your income and expenditure.

Thank you! There's so much to learn and I don't want to do it wrong by starting with the wrong bank account.

 

[joannesherrell]

I was wondering the same too! I thought you had to have a business account but I think as long as you are keeping track of your income and expenditures to declare your taxes, etc it doesn't really matter? Or does it?

 

[Simba1972]

There's no obligation to have a business account if your a sole trader, however if your thinking of employing staff then you should get one

 

[Beckybee]

Keep business and personal accounts seperate. Then you know all the money in that account is for business, if mixed then surely you have to keep doing sums to make sure your not spending the family money on stock or buying stock with the money set aside for the gas bill...just makes things easier.

New business accounts normally comes with 12 months free banking. Then you pay to put money in, it's an overhead charge for it.

Can a Pdq machine be used on a personal account?
Some business accounts come with benefits.vehicle recovery and things like that.

 

[Bettyboobumpkin]

You do need to get one if you're doing this full time and seriously. Most banks give you the first years business banking free and you need it for tax purposes.

 

[AcidPerm]

You do need to get one if you're doing this full time and seriously. Most banks give you the first years business banking free and you need it for tax purposes.

No, there is no legal or tax requirement compelling you to open a business bank account.
It can take a few years to get really established with a busy clientele and throwing money away on bank charges after the first year of operation, isn't necessarily a good idea.

 

[Bettyboobumpkin]

No, there is no legal or tax requirement compelling you to open a business bank account.
It can take a few years to get really established with a busy clientele and throwing money away on bank charges after the first year of operation, isn't necessarily a good idea.

You'll have fun doing your tax return next year without it. I wouldn't want to try it!

 

[AcidPerm]

You'll have fun doing your tax return next year without it. I wouldn't want to try it!

What difference does having a business bank account make in comparison to say, a savings account?

 

[lilyloukatiekoo]

If your a sole trader you don't need a separate account,

I had a business account for the first 5 years of being mobile
And after the first year , I was just throwing money away on the charges £1.50 to put in a cheque!

I now have a separate current account ( which is allowed if a sole trader)
So no different from using a business account when comes to tax return

 

[CFBS]

You'll have fun doing your tax return next year without it. I wouldn't want to try it!

It doesn't make any difference to completing your tax return which type of bank account you have.
As long as you are not mixing your personal and business money it is all quite straight forward when you come to work out your end of year profits.

 

[jemma890]

I write all my incoming and outgoing money down for the business, and that's what I use when it comes to filling my tax return.

 

[Minkeybox]

Hmrc only want to know income & outgoings/ profit/loss. Whether its in a personal account, bussiness account or shoe box under your bed they dont care & there is no legal requirement for either.

I begrudge every penny I pay out in banking fees, the first year was free which was handy but I pay an average of £30 a month now

Thats nearly 2 new gel polishes Xx

 

[HairbyTor]

Thank you for all the comments! I'll definitely get a current account for now and when I'm fully established look at a business account.

 

[jmoseley07]

I'm well established and still only use my current account. All my earnings go into my personal account, it's so mixed up but it really does not matter. Aslong as you know your ins and outs, then all is good x

 

[JanVenus]

A simple excel spreadsheet or even just a cash book helps chart income/expenses. You could even use an ordinary notebook - Income at the front, expenses at the back - I take 10 mins (if it even takes that long!) every Friday to update mine and use my personal bank account. Absolutely no problem when it comes to tax return time.

 

[HairbyTor]

A simple excel spreadsheet or even just a cash book helps chart income/expenses. You could even use an ordinary notebook - Income at the front, expenses at the back - I take 10 mins (if it even takes that long!) every Friday to update mine and use my personal bank account. Absolutely no problem when it comes to tax return time.

Thank you, I will probably do this for the first year and see how it goes!