Business account for three activities?
Discussion
Can anyone recommend a business account that will allow me to take payments for multiple activities?
I'm employed two days a week as a graphic designer. This pays my half of the rent and bills at home so all good there. I'm in the process of setting myself up to do freelance design on the other three days, but also to try to sell my music and paintings as well. I've tried to set up a business account with Lloyds but got stuck because they say I have to have a separate account for each activity. I really don't want that sort of aggro - I just want one account that can receive payments for all three activities. NB. I'm aware that I need to keep a separate set of accounts for each activity where submitting tax returns are concerned - I have an accountant onboard to help with that.
I'm employed two days a week as a graphic designer. This pays my half of the rent and bills at home so all good there. I'm in the process of setting myself up to do freelance design on the other three days, but also to try to sell my music and paintings as well. I've tried to set up a business account with Lloyds but got stuck because they say I have to have a separate account for each activity. I really don't want that sort of aggro - I just want one account that can receive payments for all three activities. NB. I'm aware that I need to keep a separate set of accounts for each activity where submitting tax returns are concerned - I have an accountant onboard to help with that.
Ean218 said:
Once the account is open you can use it how you like.
Except they won't progress opening it until I choose one of the three activities that I specified when I was applying online.Mandat said:
Are you self employed / sole trader, or will you be running a limited company?
Sole trader.Mandat said:
Why do you need to have separate accounts for the different activities?
Search me!Mandat said:
will you be setting up three separate companies?
No. I just want a simple way to bank my income and keep it separate from my personal money. Basically I was made redundant last year. Took some time out to have a break, consider my options, do some e-learning courses. Took a part time job in Feb that pays my half of the rent and the bills at home and want to spend the other three days trying to make a go of freelance design work and selling my music and my paintings. I'm just a regular bloke with the potential to make a bit of money and wanting to bank it! I'm not Philip Green!!!!!MitchT said:
Ean218 said:
Once the account is open you can use it how you like.
Except they won't progress opening it until I choose one of the three activities that I specified when I was applying online.As Ean218 suggests - once the account is opened then use if how you like. If you receive a payment in to that account from Jo Bloggs bank account, or Paypal, or Stripe etc. there is no way for the bank to know what it's for anyway.
As you are trading as an individual, you don't even have to open a separate business account - although most accountants will recommend that you do.
Aside from the issue of bank accounts, how do you plan to record and account for the income and expenditure of three separate and unrelated business activities?
Under the current Self Assessment system, you will need to complete THREE separate sets of "Self Employed Activity" pages (or the on-line equivalent) showing clearly the income, expenditure and profit or loss of each separate trade. Depending on how big these trades become, you might also need to submit balance sheet details.
When making tax digital comes in properly in (now) April 2019, you will need to submit four quarterly returns for EACH of the speparate trading activities. You will also need to make an annual submission for each activity. That is 20 on line submissions a year.
Have fun.
Aside from the issue of bank accounts, how do you plan to record and account for the income and expenditure of three separate and unrelated business activities?
Under the current Self Assessment system, you will need to complete THREE separate sets of "Self Employed Activity" pages (or the on-line equivalent) showing clearly the income, expenditure and profit or loss of each separate trade. Depending on how big these trades become, you might also need to submit balance sheet details.
When making tax digital comes in properly in (now) April 2019, you will need to submit four quarterly returns for EACH of the speparate trading activities. You will also need to make an annual submission for each activity. That is 20 on line submissions a year.
Have fun.
48k said:
Then pick one and get the account opened.
As Ean218 suggests - once the account is opened then use if how you like. If you receive a payment in to that account from Jo Bloggs bank account, or Paypal, or Stripe etc. there is no way for the bank to know what it's for anyway.
Yep, I'm guessing that's the answer. I'll have a business PayPal account which is what most of my income will go into so there's no way to know where it came from prior to that.As Ean218 suggests - once the account is opened then use if how you like. If you receive a payment in to that account from Jo Bloggs bank account, or Paypal, or Stripe etc. there is no way for the bank to know what it's for anyway.
Eric Mc said:
As you are trading as an individual, you don't even have to open a separate business account - although most accountants will recommend that you do.
In my case, I probably do. My music will be sold on Bandcamp and they insist on you using a PayPal business account. I don't want to convert my personal PayPal account into a business one and I can't associate two PayPal accounts with one bank account, so I need another bank account. Makes sense for it to be a business account.Eric Mc said:
Aside from the issue of bank accounts, how do you plan to record and account for the income and expenditure of three separate and unrelated business activities? ... etc.
One set of accounts for each activity. I have an accountant on board already. They're going to help me make sure everything's in order.Simpo Two said:
If you're actually Employed as a graphic designer then your salary should arrive by PAYE once a month.
I am and it does.Simpo Two said:
As for freelance design and paintings/music, just shove it all in together.
Yep, but just declare "design" as my activity to stop the them insisting that I have three separate bank accounts!Simpo Two said:
Split them out in the accounts if you wish...
My accountant wants me to keep separate records for each activity.Simpo Two said:
... but for tax purposes it's all the same.
Yes, though I guess I can't offset all my outgoings against all my income in one lump as I can't use income from one activity to pay for costs incurred doing another activity. Right?MitchT said:
Simpo Two said:
... but for tax purposes it's all the same.
Yes, though I guess I can't offset all my outgoings against all my income in one lump as I can't use income from one activity to pay for costs incurred doing another activity. Right?Do plumbers who also do heating (i.e most if not all plumbers) have to show accounts for plumbing jobs (e.g. leaking tap) and others for heating jobs (e.g. new rad valve) even if they were for the same customer?
JM said:
MitchT said:
Well, I'm guessing if I make £1k from design work I can't spend it all on music gear and declare zero profit!
Why not, if you're a sole trader, it's the profits of the combined income(s) you are taxed on. If one activity makes a profit and the other makes a loss, you are allowed offset the loss on one against the profit on the other. But you are not obliged to do that if you don't want to. You might want to carry the trading loss forward for offset against future profits from that specific trading activity.
You can also offset trading losses against other non trading income in the same tax year- such as salary taxed under PAYE. So you could get some of the PAYE you had already paid refunded to you.
Your activity is close enough to just be deemed as 'media activity' or 'artistic creation' - or whatever they need you to say. Are you going with that bank because your personal account is also with them?
As has been said; just say it's for art and design and leave it at that; if they push further - just say it's design work. Once open; you can take money in for all of your listed activity. It's all related in my mind.
I had the exact scenario myself some time ago and Barclays opened the account no issue; it was also for freelance design work and music / art. Never an issue.
As has been said; just say it's for art and design and leave it at that; if they push further - just say it's design work. Once open; you can take money in for all of your listed activity. It's all related in my mind.
I had the exact scenario myself some time ago and Barclays opened the account no issue; it was also for freelance design work and music / art. Never an issue.
I'd say that for the purpose of the excercise, design, art and music are all close enough to be one.
Your PAYE income comes in (presumably to an ordinary bank current account) as a single monthly payment, great. That's easy to split out. Now, as a sole trading design/art/music person there's no reason your self-employed income can go in there too. I suspect there will not be many transactions. Now, when your statement arrives each month, just highlight the trading transactions from the personal ones. If your accountant can't work with that, get another one. In fact I'd suggest all you need is a decent bookeeper.
Accountants don't like private and personal monies mixed up; it's seen as 'not right' - BUT if you split them up clearly I can't see there's a real problem. I think yours is leading you up a path of excessive complexity.
Your PAYE income comes in (presumably to an ordinary bank current account) as a single monthly payment, great. That's easy to split out. Now, as a sole trading design/art/music person there's no reason your self-employed income can go in there too. I suspect there will not be many transactions. Now, when your statement arrives each month, just highlight the trading transactions from the personal ones. If your accountant can't work with that, get another one. In fact I'd suggest all you need is a decent bookeeper.
Accountants don't like private and personal monies mixed up; it's seen as 'not right' - BUT if you split them up clearly I can't see there's a real problem. I think yours is leading you up a path of excessive complexity.
100% agree.
I originally ran my small accounting practice as a sole trader and I never bothered setting up a separate business current bank account. I just continued to use the personal bank account I'd been using up to the moment I started receiving self employed income.
Of course, I was my own accountant and had no problem differentiating between salary income and personal sole trading income.
Eventually the salary income stopped and all the income coming in was from my sole trading activity - but I still never bothered setting up an actual business bank account.
I only opened a business account when I moved my trading over to a limited company and, of course, in those circumstances it is expected and normal to have a new bank account opened in the name of the limited company.
I originally ran my small accounting practice as a sole trader and I never bothered setting up a separate business current bank account. I just continued to use the personal bank account I'd been using up to the moment I started receiving self employed income.
Of course, I was my own accountant and had no problem differentiating between salary income and personal sole trading income.
Eventually the salary income stopped and all the income coming in was from my sole trading activity - but I still never bothered setting up an actual business bank account.
I only opened a business account when I moved my trading over to a limited company and, of course, in those circumstances it is expected and normal to have a new bank account opened in the name of the limited company.
I'd be happy enough to let the money go into my personal account, but the issue is that to sell my music on Bandcamp I need a PayPal business account and, as I said earlier, I don't want to convert my personal PayPal account to a business account, which means I have to have two PayPal accounts which means I need another bank account. I've heard that banks get twitchy if you have a second personal account but are using it to process business money, hence the need for a business account.
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