We are hoping to have our cottage ready to let out by the beginning of September, and the time has come for me to open a bank account to run the cottage from as I will be installing wi fi imminently and want any direct debits to come out of a 'cottage' account for all its income (rental income) and outgoings (expenses). My question is do you think i can get away with opening a normal current account rather than a business account? It is only the 1 cottage, and would most likely be with the Halifax.
Thanks in advance for any advice, Clare
current account for cottage?
Re: current account for cottage?
Yes, I am almost certain you will be able to do that. We have run our single rental property using an ordinary current account with HSBC for many years. Times have changed in the banking world and banks seem to view all new applicants with deep suspicion these days. Still you must give it a try in view of the bank charges you will save by not opening a business account.ClareW wrote:My question is do you think i can get away with opening a normal current account rather than a business account?
I run my holiday cottage business as a separate business from my other businesses (including my farm) and have a separate ordinary bank account for the cottage business from which all bills are paid and into which all rental income is paid.
This account is with the same bank where I have a current account, a deposit account and a joint account with Mr AW. I've done this for 18 years and there's never been a problem.
I would suggest that if you expect to stray over the VAT threshold, it may well be better having a business account, otherwise, there really is little point.
This account is with the same bank where I have a current account, a deposit account and a joint account with Mr AW. I've done this for 18 years and there's never been a problem.
I would suggest that if you expect to stray over the VAT threshold, it may well be better having a business account, otherwise, there really is little point.
If you want to find me, Google The Barton Poughill!
-
Joanna
- Posts: 1091
- Joined: Thu Aug 23, 2007 3:12 pm
- Location: Chester, North West England & Sidmouth, East Devon
- Contact:
When we bought our first cottage we set up a separate personal current account and it came as a package with an online savings account (no cheque book or debit card, online transfers only). This worked really well - the current account for mortgage, utilities, etc. And we give guests the savings account details if they want to pay by bank transfer. That account can't have direct debits on it, has no overdraft facility and we transfer money out shortly after it arrives so giving out the details is pretty risk free.
We did the same again when we got our second cottage so we now have 2 savings accounts and 3 current accounts all with the Co-op bank. I recommend using the same bank as your personal account if possible as it makes it easy to see all your accounts on one dashboard and move money around instantly.
I don't think it would be a problem for the bank unless you were turning over large amounts of income and having hundreds of transactions a week. Our cottage turnover is similar to the sort of income I got when I worked freelance and it never occurred to me to get a business account then.
We did the same again when we got our second cottage so we now have 2 savings accounts and 3 current accounts all with the Co-op bank. I recommend using the same bank as your personal account if possible as it makes it easy to see all your accounts on one dashboard and move money around instantly.
I don't think it would be a problem for the bank unless you were turning over large amounts of income and having hundreds of transactions a week. Our cottage turnover is similar to the sort of income I got when I worked freelance and it never occurred to me to get a business account then.
Jo
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
That's very good news, Clare. One less thing to think about and an important one at that.ClareW wrote:Just to say that I have now been into branch and opened up a new current account being totally upfront about its purpose for a holiday let and it was absolutely fine- not one mention of a business account!
Could you not just add it into your income from building societies etc when you fill out your tax return? Use the £1000 personal savings allowance everyone now has if your income is below £43K ? It wouldn't have occurred to me to add it in as income in that way.zebedee wrote:You will of course, have to add the interest payments to your profits and pay tax on it though
I would think that if you can claim against bank charges from a dedicated account, you would also need to declare the profit.
Without the money paid to you from the holiday property you would not have the interest paid as it is a profit on the income.
IANAA though, but I'm sure someone on the forum can confirm the rules.... please?
Without the money paid to you from the holiday property you would not have the interest paid as it is a profit on the income.
IANAA though, but I'm sure someone on the forum can confirm the rules.... please?
-
akwe-xavante
- Posts: 306
- Joined: Wed Jul 01, 2015 3:19 pm
- Location: East Yorkshire
As I understand things there are only a few situations whereby a "Business Bank Account" is mandatorily required by law despite what the banks tell us.
If the business is a partnership
If the business is a LTD company / business
If your taking card payments directly into the account in question using a Merchant Service.
Not sure about VAT registered businesses
Registered Charities
A local club, canoe, walking knitting club (Considered to be a partnership of a group of people "Officers" of that clubs committee).
Just because its a business doesn't mean its mandatory to have to pay for business related services.
You don't need a business phone line or business rated internet access. Consider applying for business rates apposed to council tax and claim 100% small business tax relief and get a council tax refund too.
The banks may tell you that by law you have to have a business bank account to run a business, this is a lie and complete twaddle.
If the business is a partnership
If the business is a LTD company / business
If your taking card payments directly into the account in question using a Merchant Service.
Not sure about VAT registered businesses
Registered Charities
A local club, canoe, walking knitting club (Considered to be a partnership of a group of people "Officers" of that clubs committee).
Just because its a business doesn't mean its mandatory to have to pay for business related services.
You don't need a business phone line or business rated internet access. Consider applying for business rates apposed to council tax and claim 100% small business tax relief and get a council tax refund too.
The banks may tell you that by law you have to have a business bank account to run a business, this is a lie and complete twaddle.