![]() This is a lot easier to do if you operate a dedicated business account rather than have personal expenses and business costs mixed up in the same account. You need to let HMRC know how much money the business has made while deducting allowable business expenses such as for office equipment and travel, to work out your tax liability. Whatever your business structure, you’ll have to complete an annual tax return. Some may even threaten to close down your existing account unless you open one for business. ![]() On the other hand, if you’re an Amazon or eBay seller generating multiple transactions, your bank will certainly notice and is likely to react. This can vary from bank to bank.įor example, if you’re a web designer or freelance tutor and carry out relatively few transactions in a month (fewer than 20 say), your bank may be fine with you using your personal account. If suddenly there’s a lot more activity including transfers and deposits, the bank could require you to open a business account. ![]() ![]() On the face of it, this may seem the easier – and cheaper – option but look again at the terms and conditions of your personal account.Ĭhances are that somewhere it is stated the account is designed for personal use only. However, even if you don’t have to open a business account, there are plenty of reasons why you should consider doing so! Using your personal account for businessĪs a sole trader, you’re allowed to use your personal account for business transactions and can even open a second personal account exclusively for your business. There is a legal requirement to keep your personal and business finances separate. ![]() On the other hand, a limited company must have a separate business account, as it is a distinct legal entity. If you set up as a sole trader (‘self-employed’) you can use your personal bank account. The answer, at least as far as UK company law goes, is clear: It’s a question that many people ask before starting their own business or launching a freelance career. ![]()
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