Best to have a business bank account?

[slippy]

If you use a personal bank account for all money going in and out is this OK?  I was paying cash in and mentioned having receipts separate for cheques and cash for tax purposes. The lady said if this business account u need a business account.  I lied and said it wasn't.  Should I get a business account and do u have to pay? 

On the topic of receipts and accounts for tax.   I keep a folder with monthly separators and clear pocket files and put all receipts and invoices in these.   Is this wise?  

 

[J and S]

Your bank will rumble you eventually and make you either open a business account or they will stop processing transactions.

I have a separate business account with a different bank.

 

[dan2016]

Have used my lloyds Personnal account for sole trader on off for 20 years. No problem


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[Part Timer]

If you mainly get paid in cash and only get a few cheques and online payments a month then you'll probably get away with a personal account. 

If you open a business account you will probably get the first year or two free. You will then need to work out paying a higher monthly fee and low transaction costs or low fee and higher transaction charges. 

 

[J and S]

dan2016....do you take a lot of online payments....that's what got me.

 

[Coldbathkid]

I've been Self employed for 31 years and never had a business account. I bank with Santander and people pay me through BACS every day.

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[Alec]

I’ve had a personal account for 15 years used mainly for business. You bank will not ever notice unless you start banking shed loads of cash as it’s cash & cheques that cost. So just stagger them & you got free banking dude


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[J and S]

If I were to do it again I would use personal account for online payments and savings account for bulk cash......wait till I get say £500 cash and then put in savings account......haven't had a cheque for years.

The bank said I was using the current account as a business account and told me to stop....that was 10 years ago.

 

[Nicky]

I’m about to close my business account and use my personal account sick of the bank charges every month and if they rumble me I will open business account with them and get 1 or 2 years free banking and then move banks every 2years or when free banking ends

 

[CM Cleaning Services]

Wow I hope I haven't made the wrong choice going for a business account then :/

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[windowsurfer]

My accountant said it was perfectly fine to use personal account n bank cant force you to open business account. My bank said to me n my wife a few times, but afyer explaining to them what accountant said, they no longer say. I get paid in cadh,cheques and BACS n one direct debit.

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[Bart90]

 I'd strongly recommend avoiding a business bank account.  They take you to the cleaners. Do it from a personal account and just have two, one for the business and one for yourself which ticks the HMRC issue.  I've been running out of my personal account for years, at first they tried to get me to switch but i refused because there's nothing in it for me.  As far as I'm concerned they should be thankful i bank with them, let alone charging me for it.  Profit is my time, and they ain't getting a penny while their chief executives take big bonuses and cripple the economy periodically.  Anyway, rant over - now they've given up on selling me business banking and just let me be......

 

[slippy]

I am using Lloyds for business. If they rumble me I will tell them to close the account and I will use my HSBC personal account instead. Thieving bankers.  I am with Barclays as well, but like to use that for personal stuff. 

 

[Michael Anderson]

Its harder to seperate business and personal on the one account.Cheques are being faded out soon so bacs for big payments are way to go.Personal account in say your middle name and just use it for business much easier for accounting at end of year.And yes banks are ripping the ass out of us with their charges.Many banks offer free banking for 18 months then just switch to another if you want a free business account.

 

[Gavin]

I use personal account but this account is only used for business stuff so no mixing up personal and business income/outgoings.

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[spruce]

Wow I hope I haven't made the wrong choice going for a business account then :/

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It depends on the 'deals' your bank is offering. They may seem very appealing to lure you in, but once the honeymoon period is over, you are at their mercy.

Natwest hammer business account holders. Every transaction in and out (except credit transfers into your account) gets charged. A friend does roofing part time and he told me his monthly bank charges are in the region of £80.00.

We clean the windows for the company my wife works for. They will only deal with cheques as paying via bank transfer costs much more per transaction, even when they take into account the postage charges sending the cheques out in the post. 

I think its more difficult to change accounts these days @Michael Anderson tbh.

The banks know that once they have hooked you its very difficult for you to change banks further down the line. It was easy years ago when we just paid cash and cheques into our account, but with lots of customers paying on line, getting people to change their details takes a lot of effort and patience.

For me, changing a payee's bank details on my account requires a card reader and much more time than just altering a sort code and account number. Its actually easier (or it was) to delete the payee and then start again.

 

[Cghwindowcleaning]

I have a business account and have for many years.

I like to keep personal and business accounts  separate and also means I can take payment in my company name which would be a problem if I used a personal account.As well as making it easier if there was ever a tax investigation or I came to sell up.

Having a business account can also help if you need borrowing for the business.

Not for every one but works for me.

Any thing business related will cost you more like insurance, banking,utilities,etc you just factor that in to your costs.

 

[slippy]

Don't think I have standing orders set up with the fee customers who do bacs.  I just send them the bank details for the transfer.  Mostly cash and cheques.  Next time keep my mouth regarding tax  shut when paying in to not arose suspicion. 

 

[Neilmnwc]

I don’t have a business account & personally don’t want one as I can’t see that I’d gain much, but I’d lose a lot in charges.
I was chatting to my accountant and asked him about them, he said that using a personal account for business effectively gives HMRC full access to all personal accounts, whereas if I’d used a business account that’s where it stops.
After thinking about it, I don’t really have much anything to worry about it’s all recorded, I’ll stick with a personal one.


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[J and S]

Mine charge £6 per month and only charge extra for cash and cheques paid in not online transfers.

 

[Neilmnwc]

Mine charge £6 per month and only charge extra for cash and cheques paid in not online transfers.

Who’s that with? Doesn’t seem too bad put a lot of my work is cash paid in.


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