Small Biz MoneySaving
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Archived September 2016
Keeping small business bills down is easier than you think, using the same techniques you use for slashing household costs.
This small business MoneySaving guide gives you the best business bank accounts and savings, utilities, phones, broadband, insurance and more.
In this guide
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What do I need to do when I set up a business?
It’s a common question – who do you need to tell/register with to set up a business? This Gov.UK page has the basics of setting up the things you need, but, it won’t surprise you to hear that one of the first people you should tell is the taxman.
HMRC has set up an online ‘e-learning course’ to help you with questions you might have about tax and national insurance, or how to start and keep the correct business records. It’s useful if you’re just setting up and helps you start with good business habits. Or see its list of business tax webinars, videos and other resources to help once you’re up and running.
Best business bank accounts
Once you’re registered, you’ll need to find a business bank account. Unlike personal bank accounts, which are usually fees-free if you’re in-credit, the opposite’s true for their business brothers. Charges of Ј25 per transaction are possible on top of monthly account fees, and this can be a nightmare. There are four steps towards beating these.
Step 1: Use a personal account if you can
If you are a sole trader (not a limited company), then you may be able to use your normal bank account for your business, with all the better terms that involves (though check your terms & conditions – some banks won’t allow this).
However, using a separate, dedicated account could make your record-keeping a lot easier. It could also be a huge help if HMRC selects your tax return for an in-depth inquiry. For all the best buys, see the Top Bank Accounts guide.
If you make a large number of transactions, deal with big sums, or need to regularly bank cash, then your bank may suggest getting a business account. If that’s likely, start with the right one straight away.
Step 2: Lowest charge business bank accounts
Three accounts stand out, based on charges:
The Santander* Start Up Business Account offers unlimited free day-to-day transactions for a year – or 18 months if you’re already a Santander customer. It also pays 0.25% in-credit interest. After the end of the free period, you can choose from four different fees between Ј7.50 and Ј40/mth depending on monthly cash deposit withdrawal limits (you can choose from Ј1,000 to Ј10,000).
NatWest’s Start-ups package has18 months of free unlimited transaction banking. After that, you revert to their standard tariff, at which point you pay per transaction. You can open the account if you started trading within the last 12 months, and the company’s turnover is less than Ј1 million. Apply online, or call 0345 413 5020.
TSB also offers 18 months free banking if you’re a start up. The free banking includes paying in & taking out cash, paying in or issuing cheques, plus paying standing orders & direct debits. Services like CHAPS transfers will be charged for.
These are effectively just like consumer bank accounts and have limited features. So if you need complex facilities, such as an account that automatically works with accounting software or need business assistance, you can get these from banks, but at a price.
Business banking best buy comparison sites:
Even if you can’t find one with the services you like at a low charge, don’t give up with business bank accounts. It’s often possible to negotiate with your bank to waive the charges, so long as you stay within set transaction constraints, for example, a maximum of 10 requests to process business cheques each month.
Step 3: Minimise the charges you pay
Whatever the account, make your first job listing the fees that apply to it. Ensure you (and any staff) are aware of them.
Think about how you operate to minimise charges. Make sure you’re paid by BACS rather than cheque, stick to online banking, cut down on the cash you pay into the account, use automated transactions where possible and avoid using unauthorised overdrafts.
Make sure you check the charges in your statement, it may also help you spot problems. For example, if you accept a cheque that’s been returned unpaid by the debtor’s bank, your bank will charge you an administration cost, and you won’t get the money due. So then you can chase the payment up, and ask them to pay the incurred charges too.
Step 4: Sweep cash into savings
If you’re in the fortunate position to build cash up in your account, be sure to have a business savings account linked to it. Then you can sweep the money into it to maximise interest (see below).
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