Business bank accounts

[clockworks]

Stepping up my long term business (sole trader) from part time to full time. I have several personal current accounts to maximise interest and other incentives, and I have just been using one of these for paying in cheques and buying supplies online.

Projected turnover is around £20k, income is half and half cash and cheque, so 2 or 3 cheques a week. Most of the cash gets spent on shopping, fuel, etc.

Had a chat with an accountant today, and he said I should really get a business account. Looking at what's available, the fees seem a bit excessive. At least £5 a month, 1% of any cash transaction, and 65p per cheque.

I'm inclined to not bother. From what I've read, it's only a legal requirement for limited companies to have a separate account. As a sole trader, all my income is treated as personal anyway.

[springfan62]

I wouldn't bother but it may make doing your accounts easier if you had one.

Starling do one with no monthly fee.

[clockworks]

I can't see the point of a business account with a bank that doesn't have a local branch. Presumably I'd have to post cheques, and pay cash in locally then transfer it online?

[springfan62]

You can deposit at Post Offices, anyone who still uses cheques!

Hardly ever write one and very rarely receive one.

[Equus]

clockworks said:

...65p per cheque.

Most of our invoices are paid by bank transfer, but I understand that our business bank account (Lloyds) does cheques free if you pay in at one of their automated cheque machines. They also did the first year's banking free.

[K50 DEL]

In the same situation as you I opened a Santander small business account - had it 12 years now and have yet to pay a fee for anything.

[sgrimshaw]

K50 DEL said:

In the same situation as you I opened a Santander small business account - had it 12 years now and have yet to pay a fee for anything.

Snap, Santander have been faultless for 12yrs and I've never paid a penny in fees.

[Steve H]

For the turnover you're looking at you'd be fine just using a personal account that doesn't get used for anything else.

[clockworks]

I have to go into my local town once a week to collect and return jobs to the jeweller, so I visit the bank while I'm there. We only have Lloyds and Barclays left. Halifax, Nationwide, Natwest, HSBC and Santander have all closed, as has the proper Post Office.

I looked on the Lloyds website, and it wasn't mentioned that cheques could be paid into the ATM without charge.

What's the reasoning behind not using the account for personal stuff? I've never referred to my bank statements when filling in my self assessment.

[Patch1875]

Another vote for Santander even the overdraft fees are cheap.

[Steve H]

clockworks said:

What's the reasoning behind not using the account for personal stuff? I've never referred to my bank statements when filling in my self assessment.

Just keeps things simple for bookkeeping and if you get any investigations. Probably not an issue to do it all on one account but if it's free to use a second one you might as well keep it separate.

[22]

Santander here as well. We receive a lot of cheques (old people customers) and pop them in a postage paid envelope to clearing department (although good job I stashed hundreds as last batch sent to me were "affix stamp here".

Can't use the branch for business stuff anyway, but customer service has always been spot on.

[Patch1875]

22 said:

Santander here as well. We receive a lot of cheques (old people customers) and pop them in a postage paid envelope to clearing department (although good job I stashed hundreds as last batch sent to me were "affix stamp here".

Can't use the branch for business stuff anyway, but customer service has always been spot on.

Don’t you just pay the cheques in via the cash machine?

That’s what I do I also get loads only downside is everyone grumbling behind you as it takes ages!

[22]

Patch1875 said:

Don’t you just pay the cheques in via the cash machine?

That’s what I do I also get loads only downside is everyone grumbling behind you as it takes ages!

I've never tried, although if Santander only machines I'm scuppered anyway. Sandwiched between two towns with branches, both closing. My only visits are usually to the post office to withdraw to petty cash.