Business account

Why do you have to separate tax? I presume if you are going to be VAT-registered you would do either monthly or yearly tax return? Everything can go in the bank until Mr Tax Man asks for it [:0] Or am I mis-understanding the question? Regards, Richard
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Regards,
Richard
Retail World - Supporting Retailers Across the UK
www.retailforum.co.uk

I would have to seperate the tax because otherwise I wouldn't know what I can spend and what I need to keep in the bank for the tax. basically I need an account to store my tax. When someone gives me a cheque not only do I put the tax in there but I put my profit in there too. Do I need to then go back and take my profit out? No I am not VAT registered, it's only a small business that doesnt make a huge amount of money. Less than 15 ,000 pound a year.

I presume you are just buying form a wholesaler and paying VAT on your purchases? In which case you don't need to separate the tax. Just pay your Class 2 NI contributions, which are £2 a week I believe, and then pay tax on your earnings. Does that help? Regards, Richard
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Regards,
Richard
Retail World - Supporting Retailers Across the UK
www.retailforum.co.uk

Why not open 2 accounts with 1 bank, a savings account and a business current account. Thay way you can bank the cheques into the current account and transfer the 'tax' amount to the savings account - also making money from the interest. Use internet banking to make the transfers - you can't get any easier than that. inzvestor partnering, mentoring, investing online-offie.co.uk http://www.online-offie.co.uk Invest in New Zealand - local knowledge, local prices http://www.investinNewZealand.co.uk Member of Ecademy http://www.ecademy.com?xref=33204
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Glenn Watson Business Consultancy @ Inzvestor

dawn, I separate my tax too! i use internet banking and just transfer the percentage. make sure you keep good records of your incomings and outgoings so when it comes to your tax return you can fill everything in properly. James smith will probably reply to this (hes the forums resident accountant!)he'll set you straight and gives good easy to follow advice! www.InspiredManagement.co.uk From a small in-house function to a huge corporate event, Inspired uk will ensure that your event is a roaring success and, importantly, is delivered within your budget.
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www.rpevents.co.uk - New site is LIVE!!!
www.craftybytes.co.uk

Dawn, I see where you are coming from on this. It is worth take a little time to work out roughly how much tax you will be paying and the dates when this will be. You can then work out the % to keep aside for your tax bill so you don’t have any surprises later on. As a general rule the first £90/week is tax free, and you should keep back around 1/3 of an additional income you earn above this. Regarding bank accounts if you have quite a small number of cheques coming in (less than 100 cheques a month) the Abbey National do a great businesses bank account that has no charges so long as you stay within their transaction limits. http://www.anbusiness.com/services/charges_interest.shtml#freebank You could then have a second account (possibly a personal one) to put the money toward your tax bill every week as inzvestor suggests. Most of the other banks will offer you free banking, but it will normally run out after 12 or 18 months. If you are a bit daunted by being self employed, I am quite happy to take a few minutes (and you wont get charged) to get you off in the right direction help you out if you want to drop me an email or give me a quick call. Regards, James Smith Chartered Accountant [url]www.jamesesmith.co.uk[/url] [url]www.uktaxshop.co.uk [/url] 01284 764436
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773

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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

Many thanks everyone, your advice has helped loads! I think that I'll take you up on that offer James, sounds great, thanks. James you mention charges for the business account. What's the difference between a business account and a normal account ie. Flex account? A normal account doesnt charge and I imagine unlimited number of cheques can be put in per month. ???

anyone? difference between a business account and normal account?

Dawn, In general the banks don’t allow you to run a business (even if you are self employed) via a normal personal bank account. If they spot you are running a business via personal account they have be known to charge their top business banking tariff on all your transactions. The only real practical difference is the name on the chequebook (which will normally be your business name) and the fact it has charges on it. Regards, James Smith Chartered Accountant [url]www.jamesesmith.co.uk[/url] [url]www.uktaxshop.co.uk [/url] 01284 764436
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773

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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

Thanks james, I think that I'll go with Abbey national.

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[i]Originally posted by James Smith[/i] [br]...and you should keep back around 1/3 of an additional income you earn above this.

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