I'm just starting out as a sole practitioner and was hoping to be able to minimise the costs of opening a business bank account. Can anybody help?
I had an idea that I may be able to satisfy the regulations by opening a personal savings account at a bank or building society where I don't hold any other accounts (so no right of set-off problems). But do the regulations insist that I specify that this is client money on the account (which will no doubt led to extra charges)? I am aware I will need to give access to someone else in the event of my incapacity. Any ideas or advice would be gladly received.
Rachel
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Replies (10)
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Just never hold Clients' Monies
Simple really!
There is no real need to hold client monies and if you don't, you can operate through whatever bank account you like.
Send your bills to clients with the accounts and tax returns and tell them to send you a cheque when they return the signed tax return to you. If they don't, phone them up and ask why.
Then you can get any tax repayments sent directly to the clients: they love to get cheques directly from HMRC.
Ethical banking
I have my Ltd company account with the Cooperative Bank. It is free for the first year and then reasonably cheap. Also it is ethical. They don't invest or have clients who are involved with the arms trade, tobacco industry, countries with poor human rights records etc etc.
Alliance and Leicester and Abbey National both do free business banking.
Using a personal account for business
If you claim that an account is a personal account when it is really a business account to avoid charges is this really "Gaining pecunary advantage by deception"? You are basing your business on a lie which cannot be ethical.
Regarding Clients Accounts.......
Whilst I appreciate that having a Clients Account may not be needed at this point in your venture, when it is, especially if you are getting your clients to pay you by monthly transfers, I have found the BOS Professionals Account very useful.
For Money Laundering purposes, you have to have a current account of some sorts in the wings. You then transfer amounts into the Prof Account and, from receipt, they pay your client/practice interest, but there is a seperate account within the account for EACH client.
You then draw down money to settle your fee notes and they get interest, you can split it, or you can have it all.
The paperwork is good and the system looks 'professional' to clients.
Bank account
Hi I dont bother with a client account either - I dont hold client money.
Just a thought - yes you can go to A&L etc for a 'free' account but dont forget if you can build a good relationship with a bank manager you can potentially get a huge amount of referal work from your bank. If you then consider the cost of bank charges it is a very cheap way indeed to get business. If you use internet banking etc the charges can actually be kept very low.
several banks offer free business banking
Abbey have a free business account as long as you payin and out less than 100 cheques per month. It is an internet account though so you can't pop into the branch, but it has worked well for me for the last 6 years. There are others out there too. Shop around to find one that suits.
Another cheap bank...
Co-op bank ofers free business checking for FSB members. You should consider joinitn the FSB, the benefits more than outweigh the costs. There's free legal advice, which paid for the membership several times over.
Agree
I agree with most of the comments - since starting on my own almost three years ago, I haven't held a penny for a client. I also haven't paid a penny in bank charges for my ltd co business bank account(A&L).
Abbey
I do have a client account, as I have some CIS clients where it is more convenient for the repayment to come to me and me to deduct my fee before repaying them the remainder.
I have a business current account and a separate client account with Abbey. No charges as long as you are within a (fairly high)limit of number of transaction per month. I have never paid any.
You pay in using the machines, and can withdraw by cheque, debit card or cash at the hole in the wall.
Never had any problems.