Business Account as a Sole Trader for side income

Hi there,

So I’m in the middle of pulling together information for my Self Assessment Tax Return, and it has struck me that it would be a whole lot easier if I had a second bank account for all income related to various side income streams that I’m trying to grow.

It’s nothing to shout about at the moment - maybe a few hundred quid a month - so with that in mind, is there any reason why I wouldn’t set myself up as a Sole Trader, and then create a free business account with the likes of Starling/Monzo and get everything paid into there?

I believe both would be free, I’d be able to claim certain expenses and it would make it much quicker to pull together relevant relevant information for my Self Assessment.

Obviously, I won’t be taking this as full financial advice and will continue researching the idea, but would be curious to hear your ideas regardless!

Cheers

I hope you are first maximising your ISA allowance of 20k a year plus your spouse? If you invest in capital growth stock rather than dividend stocks you can make a profit of almost 12k without paying capital gains. Do you really need more than 2k dividends a year? 2k divs is the maximum before tax.

Would have to be Starling. Monzo business accounts are not open to applications (+ cost £5 per month).

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Hey @Rollingskies - thanks for the reply, much appreciated!

Sorry, I should have made myself clearer. Yes, when it comes to investing and saving I’m totally making use of ISAs available to my wife and I.

This directly relates to alternative streams of income that I’m looking to build up from various work outside of my primary salaried job, which I will need to pay tax on. Things like affiliate revenue from website, various freelancing jobs etc etc

At the moment, that revenue goes into my current account - but it’s a real pain to pull it all together and isolate from my day to day living expenses when it comes to submitting to HMRC. Hence the idea to put it in a separate bank account.

Have a look at Coconut. I think they’ll do everything you want them to!

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Thanks @anon810895 - Coconut sounds interesting. I’ll definitely check them out, but will the Tax Estimates for example take into account my main salaried job as well, or just give estimates on secondary revenue streams.

I’m guessing it’s the latter, but figured I’d ask!

Ooh good question, not sure to be honest!