Too soon to start business bank account for small site?

[adzay]

Hi,
I just finished a website that aims to gain revenue through adverts shown on Site. I made it myself using money from my own personal account for things like trademarks and software.

I went to Google Adsense (please recommend any other that is better ) and they gave me an option to link with a personal or business account. That raised the question I am asking in my head.

My site is still at an infant stage (only getting 50 new views a month ..for now). Is there a need to rush and get a business bank account now, or can I manage from my own personal account?

Or better yet what are the pros and cons of starting a business bank account at this stage?

 

[TrafficGenerationSecrets]

Hi Azday,

In theory a business should have a business account, especially if you have a limited company. HMRC can play funny b***** if there isn't one and its tax time.

In practice a business bank account takes a level of turnover to make it worthwhile. There are admin hurdles to cross and bank charges....

If youre earning beer money than I wouldnt bother just yet

 

[adzay]

Hi Azday,

In theory a business should have a business account, especially if you have a limited company. HMRC can play funny b***** if there isn't one and its tax time.

In practice a business bank account takes a level of turnover to make it worthwhile. There are admin hurdles to cross and bank charges....

If youre earning beer money than I wouldnt bother just yet

Thanks TrafficGenerationSecrets,

Okay ill just continue with my own personal account, making sure to keep record of all transactions relating to my company. Once I gain a higher income from this I will create a bank account.

Many thanks,

 

[TrafficGenerationSecrets]

Hi Azday, yes thats probably the best way forward

 

[MyAccountantOnline]

Hi,
I just finished a website that aims to gain revenue through adverts shown on Site. I made it myself using money from my own personal account for things like trademarks and software.

I went to Google Adsense (please recommend any other that is better ) and they gave me an option to link with a personal or business account. That raised the question I am asking in my head.

My site is still at an infant stage (only getting 50 new views a month ..for now). Is there a need to rush and get a business bank account now, or can I manage from my own personal account?

Or better yet what are the pros and cons of starting a business bank account at this stage?

First of all you may find using a private bank account for business purposes is breaching the bank rules.

HMRC have no interest what bank account you use provided you are declaring all of your income and paying all taxes due, but, bear in mind if you are selected for an Enquiry if you are using a private bank account they will have access to all of your private transactions.

Using a separate bank account for your business does also reduce your admin; quite simply you should have less transactions to enter into your accounting system as you wont be entering numerous private transactions.

(I am assuming you are a soletrader if you are trading via a limited company you need a separate business account for your company)

 

[MyAccountantOnline]

..... HMRC can play funny b***** if there isn't one and its tax time.

Bit puzzled by that one

Can you explain please?

 

[TrafficGenerationSecrets]

Sure thing Nicola,

If there isnt a separate bank account HMRC will try to add the profits of the business venture on to whatever else you're doing (eg PAYE job).

If youre a 40% tax payer that hurts.

having a separate bank account you can at least argue that its a different business, or there is a partner there (wife), or a host of other mitigating circumstances to save tax

 

[MyAccountantOnline]

Sure thing Nicola,

If there isnt a separate bank account HMRC will try to add the profits of the business venture on to whatever else you're doing (eg PAYE job).

If youre a 40% tax payer that hurts.

having a separate bank account you can at least argue that its a different business, or there is a partner there (wife), or a host of other mitigating circumstances to save tax

PAYE income is added to self employed income so you pay tax on your total income but the tax deducted from PAYE is taken off.

You really dont pay more tax by not having a separate bank account.

 

[adzay]

First of all you may find using a private bank account for business purposes is breaching the bank rules.

HMRC have no interest what bank account you use provided you are declaring all of your income and paying all taxes due, but, bear in mind if you are selected for an Enquiry if you are using a private bank account they will have access to all of your private transactions.

Using a separate bank account for your business does also reduce your admin; quite simply you should have less transactions to enter into your accounting system as you wont be entering numerous private transactions.

(I am assuming you are a soletrader if you are trading via a limited company you need a separate business account for your company)

Thanks MyAccountantOnline,

I have another private bank account that I barely use. Can I dedicate it to my business alone or do I have to open a proper Business account (i.e go to my bank and tell them I want to open a business account).

What do you recommend?

My site is a small way to get revenue on the side as I am currently employed full time by another company. But obviously when it starts making more money It will become my priority.

 

[MyAccountantOnline]

Thanks MyAccountantOnline,

I have another private bank account that I barely use. Can I dedicate it to my business alone or do I have to open a proper Business account (i.e go to my bank and tell them I want to open a business account).

What do you recommend?

My site is a small way to get revenue on the side as I am currently employed full time by another company. But obviously when it starts making more money It will become my priority.

Personally I'd get a proper separate business bank account to avoid risking breaching your bank rules it also means you can bank cheques in your business name etc.

But I do have several sole trade clients who use a separate personal account for business including the husband of a bank manager.

 

[a1anm]

I'd also set up a business account. You can open one with HSBC and it is completely free for the first 12 months.

Doesn't take long so you don't have much to lose by doing it.