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Business bank accounts

(8 Posts)
notsohot Sat 18-Feb-17 09:49:28

DH is about to leave salaried job and is planning to retire in a couple of years. In the interim he plans to earn some money by freelancing. This is very new to us.
He will probably only work about 4 days a month for 2 or 3 clients. It's 'consultancy' type work so minimal overheads and he's not looking to increase it beyond this commitment.
Does he need a separate business account or can he use his personal account and just keep tabs on everything?

GrumpyOldBag Sun 19-Feb-17 17:33:28

It depends whether he is going to be a sole trader or set up a limited company.

Sounds as if the arrangement you describe would be fine to be a sole trader - and separate business bank account isn't needed.

If he sets up a limited company, then he will need a separate bank account.

twodrinkswithlunch Tue 21-Feb-17 17:48:44

Not true, it may be a good idea for a limited company to use a business bank account but there is no legal requirement.

GrumpyOldBag Tue 21-Feb-17 18:54:16

Sorry, yes, not a legal requirement, but a good idea nonetheless.

This article explains it well:

www.qualityformations.co.uk/blog/business-bank-account-company/

senua Tue 21-Feb-17 19:32:01

It's 'consultancy' type work so minimal overheads

Have you heard of "Making Tax Digital"?

notsohot Tue 21-Feb-17 20:34:14

thanks for responses. I was thinking he would set up as a sole trader. I heard a little bit about making tax digital on Money Box radio 4 I think.

Sammysquiz Wed 22-Feb-17 10:05:54

He can use his personal account, though he needs to be careful he keeps accurate records of what income/expenditure relates to his work. And he also needs to register with HMRC as being self-employed, but you probably already know that smile

notsohot Fri 24-Feb-17 08:23:32

Thanks Sammy - the need to register with HMRC is about the only thing we know smile.
At this stage we are not sure how much work he will pick up so setting up a business account seems like overkill if he only gets a few days work in the year. But I can see that it will mean record keeping is more straightforward and transparent.

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