Does a sole trader need to have a business bank account by law?
Can he/she use the indivudual/private account for any transaction?
Replies (10)
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No, a sole trader is not required to have a business account.
It is good practice to do so.
No
He can use any account he may have, in his sole name or with others, as a business account.
Limited Company
A limited company should have a business bank account to receive income. Expenditure can be done from any account.
A sole trader may find that their bank will insist on a business bank account being opened.
Separate account for ease of admin
I would swim against the flow and recommend a separate bank account for business so as should you be looking for the business items they are all separated.
This being noted we hardly ever see a personal bank account statement as we ask clients to summarise all transactions.
Swimming against the flow?
I would swim against the flow and recommend a separate bank account for business
How is that swimming against the flow?
Contra
I would swim against the flow and recommend a separate bank account for businessHow is that swimming against the flow?
My thinking was I was going against the growing consensus.
Not at all
The general consensus is that you CAN use any account for a sole trader, not that you should. Most people are still recommending a separate account, with some indicating the bank may insist on it.I would swim against the flow and recommend a separate bank account for businessHow is that swimming against the flow?
My thinking was I was going against the growing consensus.
It also makes any HMRC enquiry easier
Agreed that a separate bank account it is not a legal requirement for a sole trader, but it is to be recommended.
The reason I give to my clients is simply this - if HMRC enquire into your affairs they will usually ask for the 'business records'. If a separate bank account has been used this (hopefully) makes it much simpler to give over, and explain all the transactions that have gone through that separate account. If a mixed private and business account is used, it may be much more tricky for you to remember that the £300 bank deposit received two years ago was actually a birthday present from rich aunt Agatha.