Business bank account required?

[lilydaisyrose]

Hi there,

I am buying a small local publication which advertises local business and services. My apologies for another question today regarding my new business. I will be a sole trader and my turnover is likely to be around £11k per year.

Do I need a business bank account? I have set up a new current account within my online banking with the intention of receiving payments (15-20 per month) and paying my bills (one per month - printing) from this.

Is this allowed? Is it likely the bank will notice/will I get into any trouble?

The only drawback I can see if that people have to use my name for online bank transfers/cheques rather than the business name, which I guess could cause occasional problems and doesn't look as professional.

Does anyone have any advice on this please? Can I use a normal account? In your experience does this cause any problems either at the bank or with customers/clients?

Thanks in advance for your help!

[NewNameNowPlease]

I do what you're suggesting & have done for 10-11years. No problems, bank has never asked about it & all fine. It def works for me.

[TalkinPeace]

I ran my sole trader business through my personal (joint) account for years.
I only got a business account when I went Ltd.
Business bank accounts are an utter rip off and worth avoiding

[lilydaisyrose]

Thank you for your replies! I'll use a separate (non business) account. Many thanks!

[justatoe1]

Banks are now required to have a greater understanding of their customers than in years gone by so may question transactions which are clearly not usual personal ones. In addition if you are looking for lending ie personal loan, credit card or mortgage then not having a regular monthly credit can affect the scoring.
Most banks offer free banking for a couple of years, others for life plus, like you say, it looks more professional to take payment in your business name.

[TalkinPeace]

Banks are now required to have a greater understanding of their customers than in years gone by so may question transactions which are clearly not usual personal ones.

What ever gave you that idea?
Sorry but its utter tripe.

I'm an accountant and I see lots and lots of sole trader's bank statements.
Banks do not spot anything at all.

[justatoe1]

Probably being involved in the KYC programme for a major bank gave me the idea.

[TalkinPeace]

KYC is an utter bad joke : look at all the property bought in London with laundered cash from all over the world.

My MLR registration would ban me from handling any such transaction but the banks all just turn a blind eye
Coutts are one of the worst offenders

[Badbadbunny]

From my personal experience, yes, banks do notice and do take action.

We had a family convenience store and were paying through the nose for a business bank account. I started to take money (notes only) to my own personal bank where I had a number 2 account lying idle, I paid in enough to cover supplier cheques for the following week. Saved a small fortune in bank charges, but then got a phone call from the branch warning me to stop or they'd close all my personal bank accounts. Needless to say, I stopped!

I've also seen it with some of my small business clients (I have an accountancy practice). Most are OK if they only get a few relatively large transfers in each month and relatively few payments out, as the transaction profile isn't too different from a normal person who has money coming in for wages or pensions. But once the numbers of transactions start to increase, i.e. 10 or 20 regular amounts coming in every month, the bank do sometimes take notice, and I have had some clients who've had their bank accounts suspended.

So, if on a very small scale, you're probably OK, but if the numbers of transactions start to rise beyond what a normal "personal" account would look like, then you may be challenged and find yourself having to arrange an alternative bank account at very short notice if your "business" account is suspended.

[CocktailQueen]

No business bank account required - I used a personal Santander one for business for years with no problems.

[TalkinPeace]

badbad
both DH and I had all of our sales invoices paid into our personal for years - there was no way that it could have been passed as wages - if nothing else because we had our mortgage with the same bank and told them to look at our statements to prove turnover