Do you need a business bank account in the UK??
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- Опубліковано 15 чер 2024
- One of the most common questions I get asked by newly self employed people is, do I actually need to have a business bank account or can I just use my personal account? I'll try to answer that in this video. Remember I'm talking mainly from a UK perspective.
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Best of luck on your small business journey! 👍
my wife runs a LTD and started it during the pandemic, all banks inluding her own say you cant open a business account right now,
so she empied the personal account. and stopped all payments in/out and is temporarily using her personal account for business only. is this a legal issue?
I’ve got a separate current account for my business have had for years so if you are starting out open another account with a different bank than you use for your every day living expenses that’s all you need to do my accountant told me that 15 years ago
I’m so glad I found this video. After a frustrating conversation with Barclays today, this video has calmed me down
they told me today i MUST get a business account...
Starting a personal training business and you have really helped me. Thank you!
This video was really helpful. Very clearly explained. Thank you.
Thank you very much for your help and video as a ebay seller I'm going to open Starling Bank account 😊
I love your videos mate. Very insightful.
I’ve got a personal account and a business account with Starling and in the last few years I can’t fault their service.
This was a really detailed and helpful video thank you !!
you've helped me a lot explaining in plain language what I often struggle in vain to persuade business customers in my country into setting a business account as a bank representative
This was so so helpful!! Thank you for sharing!
Timeless advice. Thanks for sharing this.
Thanks for the common sense guidance, much appreciated!
No worries!
This man helps me a lot thank u so much because of u know what u telling people
Thank you for your video, the information is very helpful.
This is an old video but every useful. The one thing to consider now is when you make a bank transfer banks can check if the name matches the account details and if it doesn't you're asked if you want to proceed with the transfer at your own risk.
Thanks, your channel is amazing. My own experience is that I’ve found it impossible to set up a business bank account. I set up a limited company but I have had applications to set up a business bank account for the company rejected by Santander (even though I’ve had a personal account with them for 9 years and never gone overdrawn), Starling and Tide. They have all said they require evidence of a trading history in order to set the account up. It’s a chicken and egg situation since I need the account set up so I can begin trading!
I’ve given up and will be going sole trader and just using my existing personal account. I know it makes it more difficult to extract your business transactions out from a mix of personal ones but I can live with that. I won’t be using an accountant, just doing self assessment myself.
Thank you this was very infromative.
I think it depends on the type of business you're running - some are still heavily dependent on physical cash, and having easy access to bags of small change is a main justification of the business bank account at my work. It's also another way for them to take more of your hard-earned money, as they take a not insignificant % of each cash deposit/withdrawal.
If going through a lot of physical cash isn't an issue, I reckon it makes most sense to have two separate personal accounts, for the reasons you explain. Unless there's a compelling reason or perk that the second account should be a 'business' account - maybe if you were to apply for a bank loan at some point to expand the business, having an existing business account will get you better terms?
I set up with natwest - 18 months with no fees then a flat monthly rate, apps and software included although i cant get on with the software. Just a thought for a video - drumming up business & advertising etc? Thanks for all the videos they have been a huge huge help!!
Cheers Andy, haha sorry, I’ve actually seen this before but my memory absolutely SUCKS so it was really helpful to watch again! I’m going to stick with my personal account for the time being now I’m in the know 👍
Ha, at the rate I release videos on this channel I'm not surprised you forgot about this one! 😂👍👊
Great video! Thanks! Just wondering if you'd make a video about if it's advisable to use one umbrella business account for two different branded consultancy services? Or if not, a video on how to seek accountancy advice regarding this matter? Have a great day:)
Thank you for mentioning about an HMRC Audit. I first went freelance in 1995 and had my first audit about 6 years ago. It was a nightmare as they went through 3 years of SA and 5 years of VAT and I had only ever had a personal account. After that I went for a business account as the HMRC can only get access to that. That was the first time anyone had ever told me about what the HMRC could get hold of and the advice actually came from them, they were really friendly and found nothing really important.
I run a website and an ebay shop and lots of my customers return with more orders, they are quite happy to send bank transfers to my business account, paypal takes their pound of flesh. It makes doing your accounts easier and if you have a separate debit card it's easy to keep purchases separate.
same reason i set up a business account just makes keeping track of things a million times easier!
There is and second option to separate personal bank account from your business expenses. I mean you can open a second personal bank account instead of a business account to avoid any fee per transaction.
just starting my dog walking business pintados dog walks and your videos have hugely helped me break down and understand things thank you so much please keep them coming ill be sure to help donate when I get my first proper pay come through hehe :)
Thank you - glad they've been useful and best of luck! 👍👊
@@SmallBusinessToolbox thanks buddy im sure it will!
My partner used her personal account for business, no issues until the bank objected to the amount of cheques being paid in. I have a business account for my other business, but for my new handyman venture I'm using my personal account.
Yeah, they'll defo complain about lots of cheques. I'd set up a separate little Tide account or something - keeps things simple. 👍
Hi Andy years ago I was told as a sole trader you have to have a business account by my bank ! but I've also used my personal account because I knew that wasn't true. they soon got fed asking up and left me alone.
I’ve been self employed since 1981, just used our joint account.
Lol
I just have a separate personal account and use it as a business account
Probably the best plan. Simple cheap and you won't get confused with "business" and personal money. And possibly a seperate credit card
One meeting at the bank I was encouraged to get one but in a very probally does not matter sort of way. Then when I called they seemed very uptight when I was just trying to get into on why the benefits if I need it or not and they brought me to the conclusion I am not working with them.
Then again I think some of those guys probally want you to get a buisness account for selling the odd thing on ebay.
my bank has never asked me by letter to go buisness. when i open limited company before q4 ill get buisness account then. means i can start sales with £0 again once limited
With reconciliation, with most people's business accounts, I'd expect other transactions other than just income and expenses. Drawings, interest etc to name a few.
Thank u so much
Thank you
Thanks
How do I go about paying for things in the beginning of my business and will that affect self assessments and reconciliation?
I.e I'm at start up stage and want to buy various equipment and materials for the business. Do I wait on purchasing anything until I have the business bank account then transfer money from personal into the business bank account and pay vendors from there or can I start buying stuff from my personal account recieved money in my business account and put all the expenses and outgoings from both accounts in my account records?
Also if I used a personal account I couldn't name the account my business name could I?
I have had the cheque problem and the bank said then I should have a business account
Hey brother appreciate the video. do you know ideas how to get a business bank account for a crypto p2p sales business? or do banks just stay clear. big head ache for incoming crypto liquidity sales.
im applying for a business account but any business transactions i have a seperate debit card for anyway. i never use that account for personal expenses ever...
What do you recommend for a sole trader with an online shop plus a holiday property rental? I've just been using Nationwide for now but have been told that if they find out you've used your personal account for business, they close your account and charge you for the business fees you would have paid.
When Confirmation of Payee arrives in 2020, the payer will be asked to provide the name of the person/business they are paying along with the account number, and if the name on the account doesn't match, you won't be able to make the payment. While is is good for fraud prevention, it might lead to delays in getting paid if your bank account name doesn't match your business (trading) name closely.
Yeah - will be interesting to see how this progresses and how they'll prevent fraudsters from just setting up account names in the name of the business(es) they're impersonating. Folk need to be more careful about who they transfer large sums of money to. 👍
I live in US. I have 3 personal accounts. I operate one as business and one for bills. Other one is personal.
It's quicker and easier to open a personal account.
How would your bank know for definite that you're using a personal account for business purposes? Even if they challenged you, you could just deny it. Tell them it's private, non of their business!
This was a very helpfull video but what about people who are thinking about going self employed but have put undeclared cash into their bank accounts. If HMRC asks me to prove where it came from I have no proof!
It's not money from I'll gotten gains however I have been considering going self employed for awhile now and this is holding me back.
I’m starting an online clothing store, is it possible for me to have a sole trader account to take payments on the site? I need my company name come up on their statements and not just my name. Any help appreciated
Can you have a separate personal account just for your business for limited,
We run a husband and wife property rental business. Not limited. Where can we get a joint business account please ?
Any info on Monzo's business account?
another thing you could possibly do is just set up another account and call it business account and have all your business transactions from that one with no charges . is there any law against this ?
Which bank do you use?
Hi there, what I need to have if I want to open a business account(Lloyds)
I have allredy a limited company
Thank you
Hi there
Do you have any videos on the Patreon and hmrc
Obviously it says we pay tax globally with our subscribers, but I’m still putting money aside from it, how does HMRC AND PATREON WORK?
Please???? Thank you
also don't you get charged for PayPal income from customers ? thats why I don't do it.
When I apply for mortgage Halifax declined my mortgage cause that I didn’t use my b account for 12 months ( before that I was using my own personal account ) 😭
Find a different bank for your mortgage - that's crazy. Hope you got sorted! 👍
It's down to the regulations around lending, money laundering and fraud. As it's Halifax and they don't do business accounts, at 3 years your account becomes dormant; 15 years, and it gets removed and put into your banks unclaimed assets. Even if it's a penny. Their systems need to read what is going in and out, and also take into account your credit score. if it hasn't been used for, you guessed, 12 months, then you are unlikely to get one. The systems tend to go off 3 and 6 months, however 12 months can be taken into account for mortgages sometimes. It's just the way the system is, not the banks fault :) but you usually can get a new mortgage from a different bank e.g. you bank at halifax, mortgage at lloyds; just based off your wageslips and manually input settings.
Oh I really hope HMRC consider you to have received money when it arrives in your Paypal account, because that's what I've been assuming. Sometimes I transfer it into my bank account when it's gathered into a larger sum, but I don't consider that to be the date I got paid, just the date I did some organising.
Yes, you're doing it the right way by the sounds of it. PayPal is effectively another bank account. 👍
Hi when I started my business as a sole trader I just opened a Barclays business account. They have £6,50 monthly fee.
I have one question if you can devise me , I have a car loan which I using for my business 80% of time so how do I calculate the expenses if I pay monthly £270. (The car it's not on millage it's on total cost of running) Thanks
I would speak to an accountant about that. Don't think you can claim for the car loan - but you might be able to claim for the interest. Mileage method is much easier but an accountant is best placed to advise on your specific situation. 👍
nobody uses cheques....I had a reputable company install the electrics in my workshop, when I called to settle using my card they told me they don't accept cards, pay pal or any other electronic payments.....cash or cheque only! this was last summer.
Yeah, unfortunately there's a lot of older companies that are really set in their ways. I deal with several that still rely on faxes and dot matrix printers! Crazy. 👍😂
@@SmallBusinessToolbox Seems all of the people i deal with still use cheques!
Customers GG? Haven't had a cheque off a customer in... must be 10+ years! Interesting!
Been using a a seperate personal account for years only accepting payments by cash, chque, and BACS. But now concerned about drive for cashless society and being forced to setup a credit card/debit card facility for payments ?
Jackie Vernon Well you could do that through PayPal or similar. I created a payment link in PayPal and they used their credit card without needing to have a PayPal account themselves.
of course those cash payments also have to be reconciled
Absolutely. 👍
PayPal business account has my vote!!
I am going to open a limited company in the UK and it will be one man Company.
I have 2 questions please help.
1. As it's a new start I can not effort to rent an office now. Can I use my residence address (in London) as a Company address?
2. Is it a problem, after taking my monthly salary, if the profile of my business is 100 Pounds or Zero after the year?
Always check with your accountant, but...
1. Yes
2. Not a problem at all!
I BOUGHT USED CAR £15K CASH, TROUGH MY LTD(I am 100% share holder of the company).
CAN I RENT or lease TO ME AS A SOLE TRADER(uber porpose)? AND PAY MONTLY RENT +% BACK TO THE COMPANY TILL I REFUND THAT £15k+%? Thanks
do you have to have a business account to accept bank transfer payments for a small business?
Not mandatory unless you're a ltd. company. 👍
Barclays now close your 'business account' if you do not declare that your business is still trading.
Been running a business from Nat West for about 8 years.... They have recently forced me to start up a business account; threateningly!!!!! they were rude and aggressive towards me and would not do a thing to try to help. It was a real worry at the time.
After lots of research I opened up a Starling Business account which so far is working okay.
Its a shame as the staff in the local Nat West branch are lovely.
I’ve received a letter today from NatWest saying I should have a business account. I’ve looked at their charges, ridiculous! Especially considering that my account is well in credit, I’m lending them thousands and they expect me to pay for the privilege. They’ve given me theee weeks to respond under threat of closing my account, needless to say I’ll be looking to change the bank I lend money to.
@@adriankingdon3055 I also received another letter last week from Natwest saying the same as my previous one. I am clearly not using that account any more yet they are still trying to intimidate me. Another phone call to them with a lack of time as it is!!!
Starling so far is working brilliantly 👍
not sure if related to this but I use a card that gives me 5% cash back when I use it. how is that cash considered?
5% cash back??! Holy crap, what card is that?? 😀
Well ain't a card is a website, topcashback
Wow - impressive! I think you'd need to declare that as an additional income source. I.e if you buy something for £120 and get £6 cash back then you could either say the expense was £114 instead of £120 or add £6 to your income. An accountant would be best placed to advise on which route is best. 👍
Can anyone recommend a personal current account that allows you to use for business? I have been reading a lot of terms & conditions and several banks. Barclays, Santander, Starling, Metro bank clearly state their personal accounts must be used for personal transactions only.
I don't think such thing exists... I've never seen one. I'm also aware of a LOT of people who have used their person accounts for years without issue. Any reason not to set up a separate business account?
@@SmallBusinessToolbox I would just rather use a separate personal account for business as I will be a low earning feelancer who gets paid mostly in cash - so I would mostly be depositing cash each month. This, along with a monthly fee could be quite costly for me with a business account! thanks for your reply!
Have you had a look at my Tide vid? The charges are pretty low with them and you can bank cash at a Post Office. Might be worth checking out. 👍
I use starling as my personal account, their business account is free from what i see to, was really easy to open my account to, i dont yet use their business account or any but im just letting you know, might be worth a try as a personal account ive used them about 6-7 months now as my main account, the best bank ive been with so far.
Hi if I have around 100-200 transactions per month do I need a business bank account?
I would have said so - would get very complicated in an audit if you have 2400 business transactions over a year merged with personal transactions. 👍
Hello, Do you know How can I get a seller's permit in UK please
What's a seller's permit?
@@SmallBusinessToolbox I live in UK and I want to start my online business with shopify my question is if I should registrer my business when I will started please?
I found this super useful and am really enjoying your videos! Thanks for the information, it’s so helpful! Especially being UK based.
My only (constructive) criticism is...I am setting up my sole trader business as working from home is currently my only option due to severe obsessive compulsive disorder! I know it wasn’t meant in a derogatory way but please don’t reference OCD as being organised as it upkeeps a stigma on a super misunderstood illness! (Apologies for being nitpicky)
Thanks again and I look forward to watching more ☺️
I view OCD as a spectrum and I'm certainly on it. I write stuff on lists that I've already completed just so I can cross it off the list. Hope yours is under control. 👍😁
@@SmallBusinessToolbox So sorry to hear that you also have clinically diagnosed obsessive compulsive disorder 😔
Although I am surprised that as a fellow sufferer of a horrendous chronic illness that you would use a phrase that references a stereotype, especially in the UK where (as I’m sure you’re aware) the NHS doesn’t fully provide/understand the necessary long term treatments or therapies needed.
But anyhoo, thanks for the video 👍🏻
My only (constructive) criticism is...you should 've asked if he had OCD first instead of assuming that he didn't.
Nowadays the name of the account is relevant, with the Confirmation of Payee scheme.
any one can send me link how open lloyds or halifax sole trader account open online thanks
Hi Ahmad, you should give BOFIN a try. I have an account with them and they offer business account creation within 24 hours, they offer business accounts for sole traders as well.
Monzo dont let you use a personal account for business transactions, they shut down my account for using personal for business transactions