Close

Results 1 to 14 of 14
  1. #1
    DF VIP Member whatnow's Avatar
    Join Date
    Jan 2004
    Location
    London
    Posts
    8,215
    Thanks
    6
    Thanked:        0
    Karma Level
    782

    Default Business Banking Query

    I need to start up a business bank account and was hoping members on here could help me out a little in making sure i know my options. I'm starting a partnership, It's nothing big and we're only looking for a small starters account. Restrictions on number of deposits/withdrawls don't really matter much, I can't see us making or needing a ton of money any time soon so I was thinking of opting for a free business banking account and maybe build from there.

    From looking around aliance and lester commercial and abbey national businessboth offer free business accounts. Both accounts have a few restrictions but nothing that seems like it will get in our way for a few years (main restriction is amount of cash deposited, but then it's just a 20-50p charge per £1000 therafter)

    I was wondering if there was any downside to using free banking for a business? From looking at the other high street banks they all charge around £150 a year for a SMB and provide servies which I doubt we'll need, but they don't have any restrictions (obviously). We dont need finance or loans so that doesn't matter much. A interest free overdraft might be useful but not essential as we have minimal outgoing expenses.

    I also wondered if anyone could recommend a bank they use if they are perticurly good, or if there are any internet based ones I should consider.

    I know i'm not gonna get advice that's comparible to a Financial Advisor but I don't really think I need to see one, maybe if my business plan was more in tune and I had bigger and faster plans but at the moment we're just buiilding it up slowly and working it out as we go (for now )

    thanks for your time & sorry for the read
    I'm new to this :huh:

  2. #2
    DF VIP Member flipper321's Avatar
    Join Date
    Feb 2003
    Location
    Essex
    Posts
    2,696
    Thanks
    11
    Thanked:        131
    Karma Level
    474

    Default Re: Business Banking Query

    I'm pretty sure Lloyd's were advertising some promotion of free business banking this week too - just another one for your list.

  3. #3
    DF VIP Member Crags's Avatar
    Join Date
    Feb 2004
    Location
    Fender Shop
    Posts
    1,735
    Thanks
    3
    Thanked:        2
    Karma Level
    380

    Default Re: Business Banking Query

    Hi Shangrula

    Well, we've got our account with Lloyds, but to be honest I wouldn't recommend them - in some cases they can be great (personal manager we can call anytime and that kinda thing) but in other instances they're right cocks - I guess it's the same with all banks.

    If I was to give some advice, I would say open an account with a high street bank that is not restricted - as most will give you 12-18 months of free banking anyway if you're a new business. You never know what might happen within that timeframe, so to have no restrictions etc might come in handy, rather than having to nob about changing things. After 12 months or whatever you can always negotiate terms with the bank, or move the account elsewhere.

    Main things to think about is your general influx and outgoing of cash - as banks will charge you for things like deposits and cheques. If you're writing a shit load per day, or paying loads in per day - try and negotiate a rate with them instead of just accepting their standard practice, you might be surprised. With regards to WHO to choose, it really is a case of going round the branchs near you and see who offers you a) the best service, and b) who you feel you can trust, and who will help you if you need to ring them with a problem. Other than that they're all generally of the same ilk.

    With regards to business banking, I'm not sure I'd go for an internet based company as many times we've been extremely thankful of being able to sit face to face and explain things to our manager rather than do it via email or over the fone - it can often make all the difference.

    Guess that's about it really, not sure if it's been helpful or not - also bear in mind mate, you can open as many bank accounts as you like lol, so don't be afraid of trying a couple for a few months and see how you get on.

    Good luck with the business, and if there's anything I can do to help, just lemme know.


  4. #4
    DF VIP Member whatnow's Avatar
    Join Date
    Jan 2004
    Location
    London
    Posts
    8,215
    Thanks
    6
    Thanked:        0
    Karma Level
    782

    Default Re: Business Banking Query

    thanks for your reply flipper, the problem is that lloydsTSB, hsbc, gnatwest, barclays and co all offer 12-18 months free banking and then a yearly charge afterwards. I would go for one of these if they are cost effective to pay for what services they offer, however with only running a small business I was tempted to use a free one because I felt like I didn't need what was on offer from the others.

    hopefully someone will point out my errors and probably tell me I should pay for a better service, or confirm my plans are sort-of ok.


    edit: thanks minge, good advice mate. I quite like the option of going for a bank like Barclays and test out their free 18 month account, if I dont like it I might just transfer it all over to another 18 month trial or just a free one, it would be good to start with everything they offer and then see what I need over the year-year and a half.
    Last edited by whatnow; 5th May 2005 at 01:01 PM.
    I'm new to this :huh:

  5. #5
    DF VIP Member Crags's Avatar
    Join Date
    Feb 2004
    Location
    Fender Shop
    Posts
    1,735
    Thanks
    3
    Thanked:        2
    Karma Level
    380

    Default Re: Business Banking Query

    That's the ticket mate

  6. #6
    VIP Member CzarJunkie's Avatar
    Join Date
    Jun 2001
    Location
    Atlantis
    Posts
    13,754
    Thanks
    832
    Thanked:        3,225
    Karma Level
    1992

    Default Re: Business Banking Query

    To be honest m8 I'd reconsider settin up a partnership, the only reason being is that as a sole trader you get to turnover £56k before becoming VAT registered in any one year, then if you do go over that you can then form a partnership, which again, allows you another £56k, then if you go over that you can take the final leap to a Ltd company which again, means anothe £56k before registereing for VAt. So doing it that way you can potentially turnover £160k+ in one year before you have to bother getting VAT registered.

  7. #7
    DF VIP Member whatnow's Avatar
    Join Date
    Jan 2004
    Location
    London
    Posts
    8,215
    Thanks
    6
    Thanked:        0
    Karma Level
    782

    Default Re: Business Banking Query

    thanks CJ, this is something i've been getting nicely confused with for a few days now...i hope you dont mind if i pick your brain over it (or anyone else's).

    From looking at BusinessLink and HMCE it seems that my best option is to fill out a CWF1 and be registered as a self employed (but mention the partnership on the form). I dont know the best way to go about it (young and stupid) but I just figured registering as a partnership was the best method of attack. I'd also need my partner to fill out the same form. But then we'll be paying VAT so perhaps it's not the best method. How could you get away as registering as a sole trader while only using one business name? (or is it as simple as having two?). and ti sortof sounds like evasion of tax payment but i'm sure it's a legit thing to do.

    Sorry to sound like such a n00b (well, I am!) but if anyone's got advice, or been through this before I would really appreciate your comments.
    I'm new to this :huh:

  8. #8
    VIP Member CzarJunkie's Avatar
    Join Date
    Jun 2001
    Location
    Atlantis
    Posts
    13,754
    Thanks
    832
    Thanked:        3,225
    Karma Level
    1992

    Default Re: Business Banking Query

    I guess the keyword here is trust, when I setup in a similar situation about 18 months ago, we simply acted as 2 sole traders, I trusted him to look after the money and he did in his own personal bank account (if I ever needed any money I would just invoice him for my share of the profits), then when we had turned over £100,000k we got ourselves a good accountant and he basically set it out as though he'd earned £50k as a sole trader, then we'd earned the rest as a partnership. Then we registered a Ltd company and that gave us another £50k before we had to register for VAT.

    I would certainly speak to an accountant as they will give you invaluble advice and save you a packet.

  9. #9
    DF VIP Member Crags's Avatar
    Join Date
    Feb 2004
    Location
    Fender Shop
    Posts
    1,735
    Thanks
    3
    Thanked:        2
    Karma Level
    380

    Default Re: Business Banking Query

    Well, as far as I'm aware Shang - and being in a partnership - the VAT threshold is 56k REGARDLESS of how your business is formed - it's a Governmental set limit which is payable whether you're a sole trader selling rocket powered flip flops made of tuna paste and mung beans, or a multinational selling weapons of mass destruction to small caterpillars hell bent of ruling the garden and becoming the biggest bugs in the WORRRRRLLLDDDDD MWAHAHAHAHAH!

    Eh hum.

    Only real differences are as follows....

    Sole trader: Your tax at the end of each year is based 100% on your profits and you pay 100% of it, all on your todd. VAT is payable if your turnover exceeds 56k (or is it 58k). Your take home pay is drawings and is totally irrelevant to tax and expenses.

    Partnership: Again, TAX is based 100% on your profits as a business, but you are each billed for a % of it ie: 2 people in partnership, you both pay 50% of the tax. Your take home pay is drawings, and is totally irrelevant to tax and expenses.

    (by drawings in the above, I mean if you make 50k profit in the year - but you only spend a pound as drawings, you still pay tax on 50k)

    Limited Company: Your PERSONAL tax is now based upon your PAYE earnings, and you become a Director / Employee of your company - therefor you are paid a salary / wage which is what you are taxed upon. Meaning if you make 50k profit, but only take 1 pound in salary, you only pay the tax on the 1 pound (aswell as NI and all that shit as usual). Your wages then become an expnse of the COMPANY and are deducted from your profit, before the company pays the tax on total profit. So if you made 50k profit and paid 20k in wages (including tax which you deduct first and pay as a company) then your company pays tax on the 30k thats left. It works out exactly the same really, except a) you're no longer self employed as such, and can provide wage slips should any companies or whatever require them and b) if the company goes tits up you may not be liable for it lol. VAT limit is still 56k and you have to register for it if you're turnover is over that. In this instance you can give yerself bonuses and shit, which are exempt from tax he he. find out more about Ltd companies at http://www.companieshouse.gov.uk

    Anyhoo, quick points are - VAT is 56k (or 58k) no matter HOW your cmapny is formed. If you dont turnover more than that - you dont HAVE to register, but if you buy a lot of goods, it may work out better so you can offset the VAT - only you can asnwer that really, it's your business lol.

    I hope I helped again lol. sorry it's a long read.

  10. #10
    VIP Member CzarJunkie's Avatar
    Join Date
    Jun 2001
    Location
    Atlantis
    Posts
    13,754
    Thanks
    832
    Thanked:        3,225
    Karma Level
    1992

    Default Re: Business Banking Query

    When setting up a ltd company it is best to forget taking funds out in the form of PAYE if you can help it as a director, you can take out upto £32k a year as a dividend Tax free from the profits of the Ltd company which are taxed at just 19%. If you need to get more out then go down the PAYE route for the rest.
    Last edited by CzarJunkie; 5th May 2005 at 02:39 PM.

  11. #11
    DF VIP Member hxbro's Avatar
    Join Date
    Nov 2000
    Location
    Behind a wall
    Posts
    2,731
    Thanks
    4
    Thanked:        18
    Karma Level
    476

    Default Re: Business Banking Query

    I paid 50p personal tax last year as a director on my personal earnings, my company tax was 5.5k I did one paye last year, rest was done through dividends.

    if you get a creative accountant they can do wonders with money

    Getting back on subject, I'm with bank of scotland (halifax bank) for my business banking, I'm fairly sure the only charges I've ever had was with using cheques. Everything else I do electronically, although I do use my personal bank every now and again and just shift money around. Downsides are the internet banking side of things isn't brilliant and is limited compared to the normal halifax banking. You can set up standing orders which is how I transfer money, but it takes 7 days for a transfer.

    I do know of one person who uses a normal account for his business banking, worst that can happen is the bank can ask you to stop and make it into a business account. When I started up a few years ago my accountant said it's not necessary to have a separate account but it does make life a lot easier. I still have some transactions coming into my personal account although they don't amount to much but when it comes to doing my accounts I end up going through lots of statements to find them.

    As already mentioned find an accountants, most will give the first hour's consultation for free too.

  12. #12
    DF VIP Member Crags's Avatar
    Join Date
    Feb 2004
    Location
    Fender Shop
    Posts
    1,735
    Thanks
    3
    Thanked:        2
    Karma Level
    380

    Default Re: Business Banking Query

    Yup CJ is right. We really could go through all the possibilities here all day Shang, but in all honesty it's best to sit down with someone who really is in the know and ask them. Either an accountant, or financial advisor would sort you right out - and to a certain extent the bank may be able to help for free - but it's something you need to do.

    Hope it all goes well, lemme know how you get on.

  13. #13
    DF Rookie SatScene's Avatar
    Join Date
    Oct 2000
    Location
    N.I.
    Posts
    3
    Thanks
    0
    Thanked:        0
    Karma Level
    0

    Question Re: Business Banking Query

    just on a follow-up to this, what is the advantage of doing the Tax Assessment thing on-line, does this cut out the need for an accountant?

    thanks.

  14. #14
    DF VIP Member Oracus's Avatar
    Join Date
    Mar 2001
    Location
    The 'Port
    Posts
    245
    Thanks
    0
    Thanked:        0
    Karma Level
    296

    Default Re: Business Banking Query

    It's my job, check your PMs!

    Os`
    I cna ytpe 300 wrods pre mniuet!!! :blink:

Similar Threads

  1. Business Advice
    By brumbino in forum Forum Suggestions & Feedback
    Replies: 0
    Last Post: 22nd November 2002, 11:31 PM
  2. 250 free business cards
    By cybollox in forum Cheapskates Corner
    Replies: 1
    Last Post: 31st October 2002, 11:32 AM
  3. Xbox Storage Query
    By slain in forum Microsoft Consoles
    Replies: 1
    Last Post: 12th October 2002, 11:52 PM
  4. AR2 v2 Query
    By rmj2663 in forum Sony Consoles
    Replies: 6
    Last Post: 8th September 2002, 07:54 PM

Social Networking Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •