So, you’ve registered with HMRC as a sole trader, but do you need a separate business bank account?
A sole trader and their business is considered one entity, therefore, legally speaking, HMRC don’t require you to have a separate business bank account. However, it’s highly recommended that you do, in order to keep your personal finance separate from your business incomings and outgoings.
7 benefits to having a business bank account
- Simplify Your Cash Flow.
- Accurate Tax Returns.
- Business Credibility.
- Efficient Bookkeeping.
- A Better Credit Score.
- Business Growth.
- Features & Services.
Separate your self-employed carer business expenses
The main benefit of having a separate bank account for your business is that it is easier to identify business income and expenditure. When you file your self-assessment tax return with HMRC, you will need to identify your business expensesto offset them against your income, and make sure you are paying the correct amount of tax.
No one likes surprises when it comes to paying tax! So, in order for you to pay your taxes when the self-assessment deadline comes around, you need to put a certain amount away every month towards your tax and National Insurance contributions. HMRC has a handy tool to help you work out how much you should be setting aside, which will make paying your tax bill more manageable. Remember, preparation is key for the self-employed carer. Getting your business finances in order will allow you to focus on your clients and your career.
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