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Just out of idle interest one of my customers was telling me today how they run a small sole trader business from home using a personal Bank Account.
That got me to thinking was that illegal ?Well the upshot is that is not illegal according to some of the info I found tonight on the web. Indeed as long as your not wanting to deposit large amounts of cash it seems a few people run like this. Of course there are many reasons to run a business account as it portrays your business as being more formal, the tax man would be happier, and of course if you need a business manager and business overdrafts, capital etc a business account is pretty much the order of the day.
But for a small sole trader dealing with small amounts of cash and cheques it could be a very cheap way of doing banking. I do suspect that some banks would not like it and that they could ask you to close the account and change to a business product along with all the bank charges.
For a small sole trader business who is always in credit, does not require a overdraft facilty its an intresting idea.
I wonder if any of the list members here operate in this fashion or what stories or experiences you may have had. Personally I do run a business account and have done so since I started, the bank have never really assisted me and I have never asked them for a penny but still have to pay their excessive charges for transactions.
Banks, love them or hate them the system won’t allow you to function without them,
Re: Business Bank Account v Personal Accounts
I bank all my cash into my Nationwide Flexaccount and then write 1 cheque at the end of the month and deposit that in my business account.
I pay 1 cheque charge instead of 65p/£100.
Re: Business Bank Account v Personal Accounts
Hi
I ran my business for more than 7 years on a personal account by opening another B account without any problems at all with barclays.
I have FREE business banking as I dont run overdrafts and am in credit.business manager was told in no uncertain terms that if they want to use my money then they arent going to charge me for the pleasure.
If you are running your business in credit then you have the power to demand and get as they are the ones needing your money..No charges or I move banks.. no charges on the new bank account..they will give in.
Bryan
Re: Business Bank Account v Personal Accounts
Out of interest when you say you had a B Account which was a personal account that would I assume mean that all cheques from your customers were made out to you personally and not to a trading name if you were operating with one ?
I am with Barclays both my business and personal accounts and savings ( all eggs in one basket ) are you saying that you have a Barclays Small Business Tariff Account on which you do not pay any business charges
at all Bryan ??Re: Business Bank Account v Personal Accounts
squadman wrote:I too have been a longstanding Barclays personal and Business customer but the business bank charges have been steadily rising.
The banks have got us where they want us and the ( System ) is designed to prevent us all from having any real alternatives. I reckon we are stuck with it.
The quote above comes from the long running thread here.
Avoiding bank charges is the name of the game I guess and indeed opening a personal account to pay business generated income is not illegal. The Inland Revenue have access to all bank account details and avoiding them is not possible. The ‘Banking Code of Practice’ involves both bank and it’s customers in freely declaring the source of all incomings and outgoings. There’s nowhere to hide when dealing with banks.
Free business banking is still possible with A&L and the Abbey. I personally wouldn’t do business any other way. I run a business and I have a business account that costs me nothing. Sadly the money they pay me for being in the black has dwindled considerably this last few months but at least they pay me! 😀
Switching banks is very easy as your new bank will do it all for you. I would’nt give Barclays, Lloyds TSB or RBS the pleasure of my hard earned dosh – no sir! 👿
Re: Business Bank Account v Personal Accounts
I am also with Barclays, personal account and business account. I have used online banking for many years.
About three years ago they doubled the bank charges on my business account overnight.
In fact I posted on here about it at the time.
I now have all cheques made out to me, pay those and the cash into my personal account and transfer the whole lot over online at the end of the week.
Bank charges are now 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} less than before they increased their charges.
Jim.
Re: Business Bank Account v Personal Accounts
Hi
I have been with the Alliance and Leicester for a year now and have had no problems at all. I pay in the cheques/cash at the post office and the rest pay via bacs into my account. Bacs is used also to pay spares suppliers etc and I use the switch card for fuel etc. On line banking with them is easy as well as being safe. Cheque book only used once and there was no charge there.
All of this is free.
No harm in contacting them for additional adviceGeoff
Re: Business Bank Account v Personal Accounts
cooperative bank, free if you are a member of the f.s.b.
Re: Business Bank Account v Personal Accounts
That hardly makes it free when you have to pay over £100 to be a member of the FSB.
Im with Abbey free business banking for life.
Downside is that you have to pay cheques via post as the branches wont accept them but then the nearest abbey for me is 30 miles away so posting cheques is not a problem.
Re: Business Bank Account v Personal Accounts
Barclays Personal Account works for me as a sole trader.
I opened a personal account eighteen months ago for my business after taking advice from one of their personal bankers & haven’t paid a penny in bank charges to this day.
I visit the bank once or twice a week & pay each job in individually which annoys the hell out of the cashiers who have to log each transaction! Having confirmed a 6 billion pound profit yesterday, Barclays staff can earn their wages!Re: Business Bank Account v Personal Accounts
i am with alliance and leicester no charges at all and you get a small amount of interest you also have to post cheques but you can take them into the post office foc.I moved from natwest who would not budge on the charges £150 to renew my o/draft they quoted admin costs when i asked why the huge charge every year for doing nothing so i told them to stick it.now about £300 per year better off
Re: Business Bank Account v Personal Accounts
I am with Barclays both my business and personal accounts and savings ( all eggs in one basket ) are you saying that you have a Barclays Small Business Tariff Account on which you do not pay any business charges
at all BryanYep
I have a full business account and personal premire accounts and dont pay a penny for the business account..Talk to your manager and squeeze his nuts.
Bryan
Re: Business Bank Account v Personal Accounts
Martin Said ( The Inland Revenue have access to all bank account details and avoiding them is not possible. The ‘Banking Code of Practice’ involves both bank and it’s customers in freely declaring the source of all incomings and outgoings. There’s nowhere to hide when dealing with banks. )
Martin I was not suggesting the idea of hiding from HMRC ! merely posing the question of using a personal account to deposit ones turnover and avoiding bank charges. Its something that I have never considered until yesterday when I got talking to someone else runnig and business as a sole trader who is using a personal current account to administer their banking needs.
Mind you we currently are paying about £ 1000.00 per annum for our business banking with barclays and In light of what has been raised here I will be talking to Barclays to see if we can get free banking ! they aint gona like that !
Re: Business Bank Account v Personal Accounts
We have also used A&L for many years now, after being ripped off by RSB.
We find it very easy to use, just take cheques in an envelope to our PO.
Everyone who mentioned using them say the get banking FOC, we pay a set fee, albit low every month.
How do you get free banking?
Brian
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