Small self employed business. Do I really need a separate bank account?

[Nails<3]

I have 2 normal accounts. 1 for personal finances and 1 for business.

I wouldnt use the personal account to run your business finances through. I think it muddies the water. They need to be separate. Doesn't mean it has to be a business account.

Laura x

 

[laurakate]

Be really careful using a personal account for business. A few years ago I ran a small business through my personal account and a competitor reported me to the taxman. a couple of months previous to this I had put a large cheque into my account from the sale of my car, the taxman then taxed me on that cheque as earnings, he knew where the money came from but I couldn't prove it and he punished me by making me pay tax on everything that went through my account.

That's awful. So you were registered with hmrc but they saw the money from your car sale in a personal account and accused it of being an earning?

 

[CONNECT-2-HAIR]

Yes you should have a separate bank account for your business if you are self employed.