Bank account advice for Small Start Up Business

[Matthew Storrs]

If I was starting out now I'd run 2 personal accounts with different banks and scare the business cheques between them. I have a biznes account with HSBC because I'm a mug and believed them 6 years ago when they told me I had to have one. Gains to them are £20 of my hard earned every month- I get nothing from it.

[skyhuck]

I ran my business from a personal account for years, I only opened a business account when I went Ltd.

[simonm]

Why are people staying with the same bank? just opened another account with hsbc to run along side barclays that costs £6 a month, 18 months free business banking i can pay cash and cheques in without no additional charges, most banks have 12-18 months free business banking.

[skyhuck]

If I was starting out now I'd run 2 personal accounts with different banks and scare the business cheques between them. I have a biznes account with HSBC because I'm a mug and believed them 6 years ago when they told me I had to have one. Gains to them are £20 of my hard earned every month- I get nothing from it.

 

Running a business through two bank accounts sounds pretty dodgy

[Matthew Storrs]

Running a business through two bank accounts sounds pretty dodgy

 

To who? Perhaps It does if you are running a business with its own name and have been trading many years, but for the single man working and generally sorting his own accounts out I don't really see the problem, if your not cheating the system and have the paperwork to back it up it wouldn't be a problem.

[Matthew Storrs]

Why are people staying with the same bank? just opened another account with hsbc to run along side barclays that costs £6 a month, 18 months free business banking i can pay cash and cheques in without no additional charges, most banks have 12-18 months free business banking.

 

Laziness. And for me I can't be bothered to have new invoice pads made up and inform regular customer who have me already setup for payments etc. But yes you are right

[NFG]

Running a business through two bank accounts sounds pretty dodgy

 

I consider it acceptable practise to do a parallel run whilst you change from one bank to another.

 

However, longer term it may attract unwanted attention!

 

N

[skyhuck]

To who? Perhaps It does if you are running a business with its own name and have been trading many years, but for the single man working and generally sorting his own accounts out I don't really see the problem, if your not cheating the system and have the paperwork to back it up it wouldn't be a problem.

 

I don't understand why you would even want to run a business through two accounts?

 

When I had two personal accounts I payed all my business income into one account and made all business payments from that account. I transferred my "drawings" into the other account and ran my personal finances from this account.

 

So one account for business and one for personal.

[Matthew Storrs]

to make it not so obvious you are running a business from a personal account, and if one does get funny about it you have the other as a back up. It's a lot of faffing around come accounts time and I wouldn't want to do it now but an option for those just starting out as they can easily open another personal account and make it appear to the bank like it is just that rather than suddenly feeding lots of cheques in but no Tesco shops!

[waterbuoy]

In the past 20 years I've had three VAT inspections and one tax inspection (as a sole trader). Quite simply, they would crucify you if you were running two business/personal accounts in parallel as suggested. The transactions have to be kept separate, as suggested by Skyhuck, and completely transparent.