Business bank acct necessary for a fundraising conusltant/freelancer?

[sipofwine]

Hi - I am just starting out as a fundraising consultant and so will be earning money on an ad-hoc basis, especially at first. The bank have told me that I need a business bank account in order that those organisations that pay me can claim VAT back on their payments and also that they won't want to pay into my personal/current account. Is this correct? I was just going to open a new current account and keep that solely for self-employment purposes as the perks of having a business account don't apply to me (ie I won't be employing staff/opening premises etc). I totally get the point of keeping work expenses/income separate from personal stuff - hence my plan to open a separate current account - but is he correct in saying future sub-contractors wouldn't be happy to pay in to this? Any advice around this or indeed being a self-employed fundraiser very welcome! Thanks.

Generally, no, you don't need a business bank account. If banks are being snippy, it's because they want you to pay to hold a business account (although the co-op is free I believe) - the guy at the bank is on commission don't forget.

however I am not in your business so don't understand how it works - if you're a fundraiser, do people pay money directly to you, eg companies or individuals who are not your direct client? I can see in that situation why people wouldn't want to pay in to a personal account.

But none of my business customers have ever had any problems paying my invoices into my personal account.

Hi Wilson - yes, it will be a bit of both. Some people will pay me as my direct clients, some will be paying me via a consultancy that I will be sub-contracted to.

But you're not essentially taking donations yourself? Which would be the only reason imo to have a business bank acc, just because it sounds more 'official'.

My accountant advised me to have a business account on the basis that if the Revenue ever looked at my accounts it's less intrusive having personal transactions going in and out. But as I only use that account for business plus a monthly payment going into my main acc, I don't see the need. So don't worry about it. Although it's likely the bank may keep hassling you for their commission of course!

I'm confused.

You will be encoraging people to donate to a fund.
THat fund will pay you a wage.
That is the money that will hit your bank. Its your turnover.

The money that you persuade people to donate will never go anywhere near your bank accounts
and there isn't VAT on donations

sounds like your bank are talking utter tripe

IF on the other hand, donations come to you to be passed on you will NEED a dedicated and insured client account that will be totally separate from your income account

Hi - yes, thanks for replies. Absolutely won't be taking donations, no. I will advise charities on strategy/direction and will write fundraising proposals etc but won't be in any way involved in donations or money raised for the charities themselves. The money I receive will be consultancy fees paid (effectively a wage) either by cheque or, most likely, directly into my bank account. Thank you for help and advice - I am going to open a new current account and use that just for work income and expenditure.