bode started this topic @ 23:42 on 31/01/2007
I'm considering setting up a business and would like to know must you open a bank account in your business name?
Or can I use my own name and set up an ordinary personal account?
The nature of my business will not require a huge amount of cheques to be paid into it.
thanks
RE: Basic question bank accounts
SysOps | 01/02/2007 09:07 AM
Hi bode,
It depends on what type of business. If it's a sole trader, then yes (but not necessarily a good idea). If it's a limited company, then no.
Opening up a business account is neither difficult nor expensive, and does make life easier in the long term.
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RE: Basic question bank accounts
ianonline | 01/02/2007 03:53 PM
I would say always have a business account for every business no matter how small the business is. The reason is simple. It helps you to seperate all business transactions from personal transactions.
If however you only get one sale per week and do not believe that you will ever grow beyond this, then you may be able to make an exception. Personally I have two sales per week and I am very glad to have had a sole trader business account from the start.
I also reccommend a high-interest personal savings account into which you pay money that at the end of the tax year you will pay to Customs & Revenue. Everytime you pay yourself, put 22% into this savings account.
RE: RE: Basic question bank accounts
bode | 01/02/2007 10:59 PM
My business name is different from my own name. I wanted to avoid opening a business account due to the high costs of running one with little customer care for our trouble.
I know the banks frown on this due to the lost profits, but wanted to make sure everything was ok for the tax man. Yes it appears to be ok if you're a sole trader.
@ianonline Is the 22% to cover NICs?
RE: Basic question bank accounts
ianonline | 01/02/2007 11:16 PM
It's to cover NICS and Income Tax, you might like to make it 23% to be safe, but Customs and Revenue themselves say 22%.
With the accounts, I don't worry about charges because they are low, but that maybe because I do as much banking as I can electronically.
With your business name being different, you may want to accept payment by cheque; think of who it will be payable to.
