Business Account

[PenfoldRepair]

Hi,

I am in the process of setting up my new business which I will be starting as a soletrader. Heres the questions :

Would it be better to use my personal bank account or business?

What are the benefits to using each?

Who do you reccommend I bank with?

Does personal credit count towards opening a business account?

Thanks in advance for your help!!

 

[MartBrooks]

1) Absolutely get a business account.
2) Clarity, you have no confusion between your personal money and your business money. Your accountant will spend less time sorting it out.
3) HSBC
4) You're not being advanced any kind of credit, so it's more or less irrelevant. If you want a business account and an overdraft facility, that's a whole different thing.

 

[PenfoldRepair]

Thanks for your help. It was more the personal credit part bothering me. Well off to visit the bank for a chat i think

 

[MyAccountantOnline]

Would it be better to use my personal bank account or business?

From an accounting/tax point of view I'd highly recommend using a separate (not necessarily a business) account solely for your business.

What are the benefits to using each?

If you have a seperate business bank account it reduces admin/ bookkeeping - the time spent undertaking the bookkeeping will be reduced and possibly reduced accountancy fees. It also means HMRC dont have open access to your personal bank account if have a private account and a seperate one solely for business.

A private account used for business purposes is often a breach of bank conditions not that I've ever seen a bank taken any action for this.

A business account can be more expensive - often banks will charge for business accounts.

Who do you reccommend I bank with?

I've had no issues with Barclays and have been a happy customer for years but in my opinion they are all much the same. It really depends what facilities you require.

Does personal credit count towards opening a business account?

Yes it will for a soletrader.

 

[David Griffiths]

4) You're not being advanced any kind of credit, so it's more or less irrelevant. If you want a business account and an overdraft facility, that's a whole different thing.

It isn't irrelevant at all. Some banks won't open business accounts (even limited company accounts) if the owner or shareholder has a poor credit history. That applies even if there is no overdraft faciilty or loan sought

 

[DeanCo]

Would it be better to use my personal bank account or business?

Using a personal account for your business would allow HMRC access to your personal affairs should they wish to carry out an investigation of your business. This, for some people is sufficient reason to open a seperate bank account for your business.

I highly recommend Santander business banking which is free.

 

[PenfoldRepair]

Thanks for all your advice, I am going to pop into a few banks for a chat

 

[elaine@cheapaccounting]

Santander have been a little rubbish recently in my experience - they have over tightened up on checking transactions for fraud and have made it impossible to operate a business bank account with them.


They fail to understand the balance between effective customer service and covering themselves for fraud.


I think they need a major review of their procedures in this area but for now I have taken them off of my recommended bank lists.