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I'd like to introduce myself

  • Member PM.Dip
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  • 71 posts
  • # 71921

Hello Everyone,

I have recently passed Level 2 and I am hoping to start a business working from home. I am finding the prospect a little daunting – although looking around the forum has helped.

So any advice about any aspect of starting up would be gratefully received.

I have been asked a question by a potential client “Do I need a business bank account or can I use my personal bank account?” I told him that he didn’t need a business account but it would be better if he used a different account to his personal finances. He wants to do some self-employed work alongside his normal employment, so will only be doing about 5 hours a week. Was I right?
nckbooks
  • 328 posts
  • # 71929

Hi Clair,

You will need a separate business account should you embark into working as a self employed.
You can have another account under your name as long as you are using solely for business purposes.

This apply to your client as well.
The ICB can confirm this.

All the best,

xxx

Edited at 08 Jun 2011 08:20 PM GMT

  • Provide bookkeeping and virtual accountancy assistance service in English and French @nckaccountancy.
    West Essex Twitter:http://nckaccountancy.co.uk
    E-mail: info@nckaccountancy.co.uk

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  • 698 posts
  • # 71957

Dear Clair

The business entity concept comes into play here!!

If your client is a sole trader then you are correct there is no need for them to hold a seperate bank account to seperate the business from the persoanl activities as legally they are one and the same.

It is however as you suggested advisiable to have a seperate account for their business actitivities purely from the point of view of making the bookkeeping easier in identifying business from personal transactions when drafting their I&E to work out their tax due.

If you client is trading as a partnership then it may be more advisibale to have a seperate account for the business as the other partner may want access to it and you may not want them accessing your personal account. (My parents had a business that was a partnership between them so only operated one account)

A Limited company is a seperate legal entity in it's own right and therefore if your client is trading as a limited company it must have it's own bank account as the fund generated belong to the company until they are distributed.

I hope this helps

Kind Regards

  • Forum Moderator, South East & Greater London Regional Chairman

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  • Member PM.Dip
  • Practice Licence
  • 71 posts
  • # 71963

Thank you for your replies. He is a sole trader, so I gave him the right answer. Now hoping he'll be impressed and employ me!
Aleksandra
  • 86 posts
  • # 71979

Clair said:

“Thank you for your replies. He is a sole trader, so I gave him the right answer. Now hoping he'll be impressed and employ me!”

I'm sure he will :) Good luck Clair !
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