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business or personal accounts
Thread poster: oliver098
oliver098
Local time: 00:20
English to French
Oct 28, 2006

I am planning to start out translating and I can see that it will be useful for tax purposes to keep any money I make in a seperate account from my usual one.
I have looked into getting a business account with the HSBC, and they seem to have two types - one with lots of charges and one with fewer charges but which expects you to do a lot of banking via the net or phone and not be dropping in cheques by hand etc very often. That sounds reasonable I guess - also you get the first year free of charges anyway.
But could I just open a seperate personal account and therefore not have to worry about this issue? What are the pros and cons? My normal bank is the Halifax, which I understand does not have much reputation for business banking, but does that matter if I just want somewhere to get paid into?
The main advantage I can see is if you use a business name then you can get people to pay to that name.
However I may not do, and even if I did I can't see it's a big deal asking them to make payments to my name.


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Andrzej Lejman  Identity Verified
Local time: 01:20
German to Polish
+ ...
One advice Oct 28, 2006

Ask for the charges for receiving transfers from abroad. In some banks, especially in the older "marble" banks, it may cost lots of money.
E-banking is usually much cheaper, so why not an account with Internet & phone acces?

Good luck

Andrzej


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James (Jim) Davis  Identity Verified
Seychelles
Local time: 04:20
Italian to English
First get the business, then think about how to manage it. Oct 28, 2006

Oliver, I've been translating for 25 years and still have just one personal account, an Internet account. If you will forgive me, if you are just starting out, I think the least of your worries is which account to put the money in.

Jim Davis

[Edited at 2006-10-28 14:43]


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Astrid Elke Witte  Identity Verified
Germany
Local time: 01:20
Member (2002)
German to English
+ ...
You don't have to start a business account in the first year Oct 28, 2006

Hi Oliver,

The normal way things happen in the UK is that you run a normal current account for your business (either your existing personal account or a separate one), and the bank concerned observes that it is being used as a business account and calls you in towards the end of your first year in business to discuss (or rather to tell you) that it will be a business account from the beginning of your second year.

Until this happens, you have all the advantages of a normal current account without any business charges - so enjoy your first year!

Astrid


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juvera  Identity Verified
Local time: 00:20
Member (2005)
English to Hungarian
+ ...
The normal way in the UK? Nov 2, 2006

Astrid Elke Johnson wrote:

Hi Oliver,

The normal way things happen in the UK is that you run a normal current account for your business (either your existing personal account or a separate one), and the bank concerned observes that it is being used as a business account and calls you in towards the end of your first year in business to discuss (or rather to tell you) that it will be a business account from the beginning of your second year.

Until this happens, you have all the advantages of a normal current account without any business charges - so enjoy your first year!

Astrid


Nope.
I use the current account opened over 20 years ago on my and my husband's name. He had two businesses since, and I have been freelancing for the last 16 years.
Nobody had any objections to it. Not even the Inland Revenue, when they get my cheques written on the cheque book of our personal account.
My husband opened a business account some time ago for convenience, but it remained largely unused.
As long as you sleep well, because you know that your administration is in ship-shape, it is up to you, what account you use as a freelance translator.

Judith


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oliver098
Local time: 00:20
English to French
TOPIC STARTER
thanks Nov 2, 2006

Thanks for the advice. Perhaps a personal account is simplest then. Can you open a new personal account - maybe at a different bank - with no questions asked? Or do they normally expect you will be transferring an account from your previous bank? However The HSBC offers the first year free of charges anyway on a business account, and not too many afterwards if you are going to do most banking by phone or internet and not call in the branch a lot, so perhaps that's not too bad.

Then there are the charges for any eventual payments in foreign currency. I'm not sure how the banks vary on this or if there is any difference if the payment is going into a personl or business account?


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juvera  Identity Verified
Local time: 00:20
Member (2005)
English to Hungarian
+ ...
Second account Nov 2, 2006

You can open a second account just like you opened the first one. You are not obliged to declare how many bankaccounts you have and where. You only transfer the money from the first one if you want to close the first account alltogether.

You will have to enquire at the bank(s) you are thinking of; what documents they need for opening an accoun, for example proof of address, etc. Even more important to ask your questions about charges, conversions, difference between personal and business account.
One thing is sure, after a year you do pay charges on the business account for all transactions, and standing charge even if there wasn't any transaction.

Why not try a building society? They pay interest on current accounts.

Judith


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Samuel Murray  Identity Verified
Netherlands
Local time: 01:20
Member (2006)
English to Afrikaans
+ ...
How good is your filing system? Nov 3, 2006

oliver098 wrote:
I am planning to start out translating and I can see that it will be useful for tax purposes to keep any money I make in a seperate account from my usual one.


Really? It will only be useful if you can't keep your hands off the taxman's money. If you're worried that you're going to run into troubles, why not keep a separate account purely for expected taxes. Then you can put 30% of all income into that account, where it draw interest over the year. At the end of the tax year you'll have a nice little bonus (I doubt if you'll pay *thirty* percent for income tax, especially if you have deductions).

But could I just open a seperate personal account and therefore not have to worry about this issue?


Be sure you get an account that provides detailed statements for free/cheaply for more than just a few months, in case you get audited. For exampe, in ZA, our "savings" accounts do not keep statements on record for more than 3 months, and in case of an audit, the account holder is liable for the cost of digging up the statements at the bank's archive.

The main advantage I can see is if you use a business name then you can get people to pay to that name.


Find out if you can't register more than one "name" on your personal account.


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