[Finance] Sole trader business accounts

[sussex_guy2k2]

Hi all,

I figured this may be a good place to ask a couple of questions considering the wealth of experience on here.

I’m looking into doing some freelance, side hustle work, with the intention of building up a business that will hopefully take over as my main source of income in the long term.

Does anyone have any recommendations about the best bank accounts to start with? Does anyone have any experience with any of the main high street banks or with the app-only accounts, like Revolut?

And lastly, is it best to set up the bank account before notifying HMRC of my intention to go down this route, or is it best to use my own bank account in the short term and then create a business one once I’ve got a steadier stream of income?

Apologies for the ignorance here - any help would be gratefully received.

 

[Westdene Seagull]

Hi all,

I figured this may be a good place to ask a couple of questions considering the wealth of experience on here.

I’m looking into doing some freelance, side hustle work, with the intention of building up a business that will hopefully take over as my main source of income in the long term.

Does anyone have any recommendations about the best bank accounts to start with? Does anyone have any experience with any of the main high street banks or with the app-only accounts, like Revolut?

And lastly, is it best to set up the bank account before notifying HMRC of my intention to go down this route, or is it best to use my own bank account in the short term and then create a business one once I’ve got a steadier stream of income?

Apologies for the ignorance here - any help would be gratefully received.

Admittedly both times I've used a business account they were for a limited business but Lloyds were OK but very inflexible, HSBC were brilliant.

Why would you need to inform HMRC when you've not earnt anything yet ?

Please note I'm not an accountant or a lawyer.

 

[Wrong-Direction]

I set up a Starling account for business a few years ago, someone at the time told me it was a good choice..

 

[Super Steve Earle]

A business account helps you keep your business transactions separate from your personal transactions. Easier for you and your accountant.

 

[Weststander]

A separate bank account eg Metro from day one, is a good idea, because you’ll get in the habit of putting all business transactions through it. Making your life far easier when it comes to the annual accounts.

You have 3 months to inform HMRC, but why not do it straight away.
https://www.gov.uk/register-for-self-assessment/self-employed

There’s no requirement to run a separate bank account and HMRC aren’t interested in that.

p.s. Don’t use all the entities who’ve used Google Ads to usurp the real hmrc.gov.uk in searches. Shysters, like the middlemen who do passport services. HMRC itself is fine.

When asked the start of trading or business date, enter the earlier of the date of the first sale or the date you were first in a position to sell goods or services.

 

[WATFORD zero]

I am also not an accountant or a lawyer, but have always had a number of personal accounts. Firstly, and most importantly, all income needs to be declared to HMRC.

But banks are companies trying to make profits from you just like everyone else and the moment they hear the word 'business' they see the opportunity to increase those profits. If you're a sole trader and you don't have huge numbers of small transactions going through (particularly when you're just getting started) why would you want to open a 'business' account

And, if someone wants to charge you, why wouldn't you move account ? Good luck

*edit* You'll find the accountants answer just above mine

 

[sussex_guy2k2]

Admittedly both times I've used a business account they were for a limited business but Lloyds were OK but very inflexible, HSBC were brilliant.

Why would you need to inform HMRC when you've not earnt anything yet ?

Please note I'm not an accountant or a lawyer.

My understanding is that I need to at certain intervals and, as @Westlander stated, I have nothing to lose by telling them.

I’ve got contacts who are, rather luckily pushing potential customers my way if I can get this up and running, but I want to start with everything in place so that it’s easier to manage down the line.

Thanks for your feedback on both banks.

 

[sussex_guy2k2]

A separate bank account eg Metro from day one, is a good idea, because you’ll get in the habit of putting all business transactions through it. Making your life far easier when it comes to the annual accounts.

You have 3 months to inform HMRC, but why not do it straight away.
https://www.gov.uk/register-for-self-assessment/self-employed

There’s no requirement to run a separate bank account and HMRC aren’t interested in that.

Thanks for the advice. All taken on board and I’ll start the process of notifying HMRC this weekend.

I’d like the separate bank account to keep everything clean, as you stated.

 

[sussex_guy2k2]

I set up a Starling account for business a few years ago, someone at the time told me it was a good choice..

What was your experience of them? I’ve heard nothing but good things…

 

[Flagship]

Get a separate bank account with a high street bank as you may need to see someone face to face some time. You may need to use cash now and again so take this into consideration. Set up the bank account before you start trading.

You don't have to get an accountant straight away, but a good one will help reduce your workload and if you do get a good one they will pay for themselves many times over. Let your accountant deal with HMRC and the Inland Revenue as they will have all the contacts and this will save you time and stress.

Keep all receipts. Learn about the 'Late Payment Act', the small claim s court and Moneyclaim Direct.

Best of luck. What business are you in?

 

[LamieRobertson]

What was your experience of them? I’ve heard nothing but good things…

I use Starling and find it excellent …customer service top notch…no charges….easy to use APP…no complaints from me

 

[Weststander]

Thanks for the advice. All taken on board and I’ll start the process of notifying HMRC this weekend.

I’d like the separate bank account to keep everything clean, as you stated.

Good luck btw.

I escaped the servitude of employment years ago, the best thing I ever did.

Lots of folk start the way you are.

 

[WATFORD zero]

Good Luck, but as I suggested above, I would go for a personal account rather than a business account.

When I met my son at Wembley yesterday, he told me why he borrowed £1500 for a week a month or so ago. He has two current accounts, the one that he has his PAYE salary paid into and one he uses as a 'wallet', in pubs, restaurants, supermarkets etc. He was reading Martin Lewis website and apparently set up and 'switched' 4 current accounts from major banks, using the £1500 to transfer between them without effecting his 'actual' accounts

He told me he had made £800 which is now in his 'help to buy ISA' and transferred the money back to me in under two weeks. Apparently he's not allowed to do the same thing with those particular four banks for another five years

I use my current accounts to get Free breakdown cover, Travel and Home Insurance, Interest rates on balances etc. A few quid going between them regularly and a review every couple of months.

There's gold in them there current accounts

 

[Cheshire Cat]

Get a separate bank account with a high street bank as you may need to see someone face to face some time. You may need to use cash now and again so take this into consideration. Set up the bank account before you start trading.

You don't have to get an accountant straight away, but a good one will help reduce your workload and if you do get a good one they will pay for themselves many times over. Let your accountant deal with HMRC and the Inland Revenue as they will have all the contacts and this will save you time and stress.

Keep all receipts. Learn about the 'Late Payment Act', the small claim s court and Moneyclaim Direct.

Best of luck. What business are you in?

Have you ever tried to find a bank still on the high street. They are closing branches in droves. My nearest branch is now about 20 miles away. I haven't set foot in my actual branch for over 30 years.

 

[Herr Tubthumper]

Do not use Barclays. I have a business account with them and it's been nothing but hassle recently; they wanted me to re-confirm my business details and it took me around 7 months, numerous calls, numerous hours and numerous headaches to resolve.

I appreciate you are wanting a sole-trading account but if I can persuade anyone to not have any type of account with them it will make me feel a little better.

I also complained to their customer services. I was told that they would not uphold my complaint because they had followed all their processes correctly. I pointed out it's the processes which are at fault...the guy agreed but said they had followed them correctly....at which point I wanted to bang my head on a brick wall.

 

[B-right-on]

I've got a Starling and a Monzo business acct and they are both really good for 'digital' payments etc.. Only place I've fallen down in with cheques/cash, they are a pain. But their apps and service are really good. Both about the same and mych better that Rats Nest which I left to go to the digital banks

 

[B-right-on]

Do not use Barclays. I have a business account with them and it's been nothing but hassle recently; they wanted me to re-confirm my business details and it took me around 7 months, numerous calls, numerous hours and numerous headaches to resolve.

I appreciate you are wanting a sole-trading account but if I can persuade anyone to not have any type of account with them it will make me feel a little better.

I also complained to their customer services. I was told that they would not uphold my complaint because they had followed all their processes correctly. I pointed out it's the processes which are at fault...the guy agreed but said they had followed them correctly....at which point I wanted to band my head on a brick wall.

I agree. I left Barclays to go to Nat West about 10 years ago because they were dreadful.

 

[Herr Tubthumper]

I agree. I left Barclays to go to Nat West about 10 years ago because they were dreadful.

I did try Revolut, and whilst I had some problems due to it being a UK ltd company and me living abroad a customer services bod could see what I was doing and emailed me. They did this proactively which was impressive. I never got round to following through with the setting up, maybe when I have some time I will.

 

[sussex_guy2k2]

Good luck btw.

I escaped the servitude of employment years ago, the best thing I ever did.

Lots of folk start the way you are.

Thanks. I’m in a safe gig at the moment but feel totally demotivated and know that no matter what I do, I’ll never progress there because of the company set up. So the two options were find another job somewhere else or try to go out alone, but I thoroughly dislike working for other people, so the latter option seemed best.

It’s just having the courage to jump really.

 

[sussex_guy2k2]

Get a separate bank account with a high street bank as you may need to see someone face to face some time. You may need to use cash now and again so take this into consideration. Set up the bank account before you start trading.

You don't have to get an accountant straight away, but a good one will help reduce your workload and if you do get a good one they will pay for themselves many times over. Let your accountant deal with HMRC and the Inland Revenue as they will have all the contacts and this will save you time and stress.

Keep all receipts. Learn about the 'Late Payment Act', the small claim s court and Moneyclaim Direct.

Best of luck. What business are you in?

Thanks for this.

I’ll add this to my reading list, for sure. I have some background in these matters as my parents owned their own business as I grew up, but going through everything yourself is a different matter and I always think it’s good to get everything laid out as best you can before starting.

The skill set I’m going to be selling is marketing based. Primarily on the digital side. I’ve actually had an eclectic career so have a few skills I think I could monetise given time, but an opportunity has arisen to get some clients using this skill set so it makes sense to try and get off the ground using it and go from there.