Does Sole trader needs a business account?

[superpasha]

Hi,

I am thinking of registering as a sole trader, and at the moment I am not sure if I can work from my personal bank account or if I will require a business account.

My bank told me I need a business account, yet for some reason I am under an impression that maybe I will not require one.

Can someone please be kind enough to help me out here.

Thank you

 

[Jeremiah@RHJ Accountants]

Hi

You don't need a business bank accountant as a sole trader, as an accountant i would reccommend having a business account as this will help to record the income and expenses of your business more easily out of the business account rather than having it all in the personal one.

What trade are you in and have you thought about going Limited as this may be a more better option for you tax wise?

Jeremiah Jordan
Smith Craven Chartered Accountants

 

[fairdealworld]

Hi,

I am thinking of registering as a sole trader, and at the moment I am not sure if I can work from my personal bank account or if I will require a business account.

My bank told me I need a business account, yet for some reason I am under an impression that maybe I will not require one.

Can someone please be kind enough to help me out here.

Thank you

You don't 'have to have' a business account. When I started my own business for quite a long while I just used the personal account and went through each statement with a highlighter to differentiate business from personal transactions. If you have lots of transactions it is, of course, easier to have a separate business account especially in the long term.

Some banks will try to prevent you from using a personal account for business purposes - because they'd prefer to charge you for the use of a business account + try to start selling you all sorts of business 'services'. Realistically however some people who do the odd car boot sale and get rid of unwanted stuff on Ebay may well have more transactions through their account than many Sole Traders.

I never told my bank I'd gone into business and they certainly showed no sign of interest in the transactions going through my personal account. At a certain point my business reached a stage where I really felt I needed a business account and that was when I got one.

Official bodies such as HMRC don't care as long as they can see clearly what is business and what is personal.


though some banks will try to prevent you from using a personal account for business purposes i.e. it was a bad idea to ask your bank!

 

[brownkane]

You do not need to have a business account as a sole trader, although it may help you with your admin if you did have one. Look around at different business accounts if you decide to go that way, because depending upon your type of business and the type of transactions that you will make eg cash, cheque, Bacs, many banks will offer 'free' banking for businesses.

 

[superpasha]

Thank you everyone for your answers, it really helps.

 

[OldWelshGuy]

One thing to note is that a basic business account needen't cost you anything. The banks don't like you using a personal account as a business account, but the best thing to do if you really don't want a business account, is to have a seperate personal account, and run your bsuiness through that. It is always adviseable to have your bsuiness and personal accounts with different banks anyhow, to stop then using their legal powers and simply landgrabbing any money in one account to offset the other.

 

[glowart]

My Barclays manager was helpful
to set a Business account.

I thought it best as i have set up a Ltd company.