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4 replies

MrsCurly · 30/04/2008 10:25

This is a bit of a random question but I wonder if anyone can help.

I am about to set up a small business from home which will be VAT registered. Turnover will be no more than £100k a year. Do I need to open a business bank account or do you think I could get away with an ordinary current account, to avoid all the charges?

I've never done anything like this before so haven't really got a clue. So any advice most welcome!

With many thanks, Mrs C

OP posts:
Roskva · 30/04/2008 21:48

You could try the ordinary current account, but the bank could question your pattern of income/expenditure after a while, especially if they start noticing quarterly VAT payments. Check the small print of the account terms and conditions to see what happens if you breach them, which using a personal account purely for business purposes probably would amount to.

If you go for a business account, consider what services you need (eg will you be handling cash, or need card processing, or need change frequently, or need to pay in lots of cheques) and play different banks off against each other to make sure you get the best deal. Also find out what their internet banking facilities are and what they charge for them: for example paying suppliers by direct transfer may be cheaper than writing cheques. If you are likely to need an overdraft at any time, bear in mind there is usually a fee for arranging an overdraft on a business account, so lower/no fee and higher interest rate might be better than the lowest interest rate. Also consider things like would you want access to a night safe if your business will be handling lots of cash - not all branches of all banks have them.

Once you reach the end of any free banking period, threatening to change to a different bank can have some quite impressive effects on what your current bank can come up with in terms of charges etc.

MrsCurly · 30/04/2008 22:15

Thank you so much! That's incredibly helpful.
I love Mumsnet

OP posts:
notjustmom · 30/04/2008 22:19

This reply has been deleted

Message withdrawn at poster's request.

Roskva · 01/05/2008 14:27

Glad to be able to help, MrsC.

Actually, some business banking managers don't have authority to do very much at all without approval from higher up (mine is one of them , unlike his predecessor, who was brilliant), but if you can get figures in writing on what the competition can offer you, that usually motivates them to find someone higher up the food chain to hold their hands .

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