How to deal with clients who dont have business bank accounts?

LittleChinaDoll

Apologies in advance for a stupid question.
I spoke to a potential client a couple of days ago. He doesn't have a business bank account. All his business expenses are paid from his personal bank account + out of cash. How do deal with such business set ups (manage, control) and treat such transactions?
Many thanks

AC88

Hi,
Without a business bank account then there isn't much of a set-up there. You should advise they set-up a business account.

What size business is it?

LittleChinaDoll

Hi

He is a sole trader (handyman). He doesn't have all of his bank statements and says 80% relates to his personal stuff and 20% business. His previous bookkeeper managed his accounts with that set up. I imagine the turnover is not material.

Many thanks

AC88 said:

Hi,
Without a business bank account then there isn't much of a set-up there. You should advise they set-up a business account.

What size business is it?

LittleChinaDoll

Hi

He is a sole trader (handyman). He doesn't have all of his bank statements and says 80% relates to his personal stuff and 20% business. His previous bookkeeper managed his accounts with that set up. I imagine the turnover is not material.

Many thanks

Mickdundee said:

Is the business a company, sole trader or something else?

LittleChinaDoll

Mickdundee said:

There is no tax consequences of not operating a business bank for a sole trader. Nor is there a legal obligation to operate one.



I would advise them that should HMRC open an enquiry, then the personal account would form part of the business records, and HMRC would be entitled to look at the account in its entirety.



What's been done has been done. You'll have to deal with it as it is - nothing you can do after the event. If they continue in business without a bank account, you have advised them if the consequences and all you can do is account for the business transactions correctly.

Thank you !