Category: Tax

Factory doing R&D

R&D Tax Credits Explained: Top Misconceptions and How to Avoid Costly Mistakes

Posted on | by Jade Donno

R&D Tax Credits Explained: Top Misconceptions and How to Avoid Costly Mistakes

Research and Development (R&D) tax credits are a valuable tool for businesses investing in innovation. However, many businesses miss out on these benefits due to common misconceptions. This blog will clarify what R&D tax credits are, debunk common myths, and provide tips on how to avoid costly mistakes.

What Are R&D Tax Credits?

R&D tax credits are government incentives designed to encourage companies to invest in research and development. These credits can significantly reduce a company’s tax liability, freeing up resources for further innovation and growth. Eligible activities include developing new products, improving existing products, and creating more efficient processes.

Common Misconceptions 

1. Only High-Tech Companies Qualify

One of the most prevalent misconceptions is that only high-tech or pharmaceutical companies are eligible. In reality, companies in various industries such as manufacturing, agriculture, construction, and even food and beverage can qualify. Any business investing in improving products or processes may be eligible.

2. Small Businesses Can’t Benefit

Another common myth is that R&D tax credits are only for large corporations with substantial R&D budgets. However, small and medium-sized enterprises (SMEs) can also benefit significantly from these credits. Many countries have specific provisions to support smaller businesses, recognising their vital role in driving innovation.

3. You Need a Dedicated R&D Department

Some believe that only companies with a formal R&D department can claim these credits. This is not the case. Many businesses engage in qualifying R&D activities without a dedicated department. As long as the work meets the criteria for innovation and development, the company can claim the credits.

4. It’s Too Complicated to Apply

The application process can seem daunting, leading some businesses to believe it’s not worth the effort. While the process can be complex, there are many resources and consultants available to help businesses navigate the application. The potential financial benefits often outweigh the initial effort required.

How to Avoid Costly Mistakes

1. Understand the Eligibility Criteria

Before applying, it’s crucial to understand what qualifies as R&D under the tax credit guidelines. This includes activities that aim to create or improve a product, process, or software. Ensure your projects meet these criteria to avoid denied claims.

2. Maintain Detailed Documentation

Accurate and detailed documentation is essential for a successful claim. Keep records of all R&D activities, including project plans, experiments, and expenditures. This documentation will support your claim and provide evidence if audited by tax authorities.

3. Seek Professional Advice

Navigating the complexities of R&D tax credits can be challenging. Consider consulting with a tax professional. They can help you understand the requirements, prepare your application, and maximise your claim.

4. Regularly Review and Update Your Strategy

R&D tax credit regulations and guidelines can change. Regularly review your R&D activities and strategy to ensure they remain aligned with the current eligibility criteria. Staying informed about changes in legislation will help you continue to benefit from these credits.

Conclusion

R&D tax credits offer significant financial benefits for businesses investing in innovation. By understanding and debunking common misconceptions, maintaining detailed documentation, and seeking professional advice, you can successfully navigate the application process and avoid costly mistakes. Don’t let myths and misunderstandings prevent your business from taking advantage of these valuable incentives.

Investing in R&D is crucial for growth and competitiveness, and R&D tax credits can provide the financial support needed to drive your business forward. Ensure you stay informed and proactive in claiming these benefits to maximize your company’s potential.

Need Help with R&D Tax Credits?

If you’re looking for expert assistance with R&D tax credits, 1 Accounts can help. Their team of professionals can guide you through the process, ensuring you maximise your claims and benefit fully from these valuable incentives.

Posted In: Tax |
capital gains tax planning

Capital Gains Tax Planning: Tips for Reducing Your Tax Liability

Posted on | by Jade Donno

Capital Gains Tax Planning: Tips for Reducing Your Tax Liability

Capital Gains Tax (CGT) is a tax on the profit when you sell (or ‘dispose of’) an asset that has increased in value. It’s the gain you make that’s taxed, not the amount of money you receive. Navigating CGT can be daunting, but with careful planning, you can minimize your liability. Here are some tips to help you effectively manage CGT in the UK:

1. Use Your Annual Exemption

Each tax year, individuals have an annual CGT exemption (£6,000 for the 2023/24 tax year & £3,000 for  24/25  onwards). Ensure you utilise this allowance by timing the disposal of assets to maximise your exemption.

2. Offset Losses

Offset any capital losses against your gains to reduce the taxable amount. Keep records of past losses, as they can be carried forward to future years.

3. Utilise Tax-Advantaged Accounts

Investing through ISAs (Individual Savings Accounts) or pensions can shield your gains from CGT. Gains made within these accounts are exempt from CGT.

4. Consider the Timing of Disposal

Strategically timing the sale of assets can help spread gains across different tax years, ensuring you make full use of the annual exemption each year.

5. Gifting Assets to Spouse

Transferring assets to a spouse or civil partner before selling them can be tax-efficient, as transfers between spouses are exempt from CGT and both partners can utilise their individual exemptions.

6. Claim Entrepreneur’s Relief

If you’re selling a business or shares in a trading company, you may qualify for Business Asset Disposal Relief (formerly Entrepreneur’s Relief), which reduces the CGT rate to 10% on qualifying gains.

7. Keep Comprehensive Records

Maintain detailed records of all asset acquisitions, improvements, and disposals. Accurate documentation will ensure you claim all allowable deductions and exemptions.

8. Seek Professional Advice

Tax rules are complex and subject to change. Consulting with a tax advisor can help you navigate the intricacies of CGT and implement the most effective strategies for your specific situation.

By incorporating these tips into your tax planning, you can significantly reduce your Capital Gains Tax liability and optimise your financial outcomes. For personalised advice tailored to your circumstances, contact us at 1 Accounts Online. We’re here to help you manage your finances with ease and expertise.

Visit our Knowledge Centre for more insights and guidance.

What is capital gains tax?

Posted on | by Jade Donno

Capital Gains Tax

Capital Gains Tax (CGT) is a term you might have come across if you’ve sold a house, shares, or other investments in the UK. But what exactly is it, and how does it affect your finances? In this blog, we’ll break down the basics in a way that’s easy to understand.

What is Capital Gains Tax?

CGT is a tax on the profit you make from selling an asset. An asset can be anything from property and stocks to bonds and valuable collectables. The key point here is the “profit” part. You only pay capital gains on the difference between the selling price and the price you originally paid for the asset.

How Does it Work?

  1. Identifying a Capital Gain: When you sell an asset for more than you paid for it, you’ve made a capital gain. For example, if you bought shares for £1,000 and later sold them for £1,500, your capital gain is £500.
  2. Calculating the Gain: The capital gain is calculated by subtracting the original purchase price (plus any associated costs like brokerage fees) from the selling price.
  3. Tax Rates: The tax rate depends on your total taxable income and the type of asset sold. For individuals, the rates are:
    • 10% for basic rate taxpayers (for most assets).
    • 20% for higher and additional rate taxpayers (for most assets).
    • 18% for residential property (basic rate).
    • 24% for residential property (higher and additional rate).

Why Do We Have Capital Gains Tax?

The primary reason is to generate revenue for the government. It also encourages long-term investment over short-term trading, as holding assets longer can sometimes lead to tax advantages.

How to Minimise Capital Gains Tax

  1. Use Your Annual Exempt Amount: Everyone has an annual tax-free allowance for capital gains. For the 2024/25 tax year, this is £3,000. If your gains are below this amount, you won’t pay CGT.
  2. Hold Assets Longer: By holding onto your investments for more than a year, you may find better opportunities to manage your tax efficiently, especially when combined with other tax reliefs.
  3. Use Tax-Advantaged Accounts: Investing through accounts like ISAs (Individual Savings Accounts) can help you avoid capital gains tax on investments held within them.
  4. Offset Gains with Losses: You can use capital losses (losses from selling investments for less than you paid) to offset your capital gains, reducing your taxable gain.
  5. Consider Your Timing: Timing your sales to match years when you have lower income or greater available allowances can help you pay less in capital gains tax.

Common Questions:

1. Do I have to pay capital gains tax on my home?

    • If you sell your main home, you may be eligible for Private Residence Relief, which can exempt you from paying CGT on the sale, provided certain conditions are met.

2. Are there any exceptions?

    • Yes, there are various exemptions and reliefs. For instance, assets such as UK government gilts and certain types of personal belongings (chattels) are usually exempt.

3. How do I report capital gains?

    • For non-property gains, you’ll need to report your capital gains on your self-assessment tax return. If you do not usually file a self-assessment tax return, you can report your gains using the ‘real-time’  service provided by HMRC.
    • For property gains, you’ll need to report the gains within 60 days of sale completion through an HMRC property return form. These will then also be included in your self-assessment tax return.

Conclusion

Understanding CGT is essential for anyone who invests in assets like shares, property, or other assets in the UK. By knowing how it works and how to manage it, you can make informed decisions that can save you money and help you achieve your financial goals. Remember, tax laws can be complex and change frequently, so it’s a good idea to consult with a tax professional for personalised advice.

 

Posted In: Tax | | Tagged
R&D

What are R&D tax credits?

Posted on | by Jade Donno

What are R&D tax credits? 

In today’s competitive market, businesses constantly strive to innovate and stay ahead of the curve. One powerful incentive that can help companies in is the Research and Development (R&D) tax credit. This blog aims to break down what R&D tax credits are, how they work, and why they can be a game-changer for your business.

What Are R&D Tax Credits?

R&D tax credits are government incentives designed to encourage companies to invest in research and development. These credits are available in many countries and are intended to reward businesses that work on innovative projects, develop new products, or improve existing processes and technologies. By reducing the tax liability, tax credits make it financially easier for companies to invest in innovation.

How Do They Work?

To benefit, a company must engage in qualifying research activities. These activities generally include:

  • Developing New Products: Creating new products or improving existing ones.
  • Technological Advances: Making significant advancements in technology.
  • Process Improvements: Enhancing manufacturing processes, software development, or other operational processes.

For the full list please check out the government website – https://www.gov.uk/government/publications/guidelines-on-the-meaning-of-research-and-development-for-tax-purposes/meaning-of-research-and-development-for-tax-purposes-guidelines

Key Benefits of R&D Tax Credits

  1. Financial Savings: R&D can significantly reduce your tax bill, freeing up funds that can be reinvested into your business.
  2. Encouragement to Innovate: These credits incentivise companies to pursue innovation without the fear of financial strain.
  3. Competitive Edge: Investing in R&D can lead to new products or processes that give your company a competitive advantage.
  4. Increased Investment: The financial relief provided by these credits can encourage further investment in research and development.

Who Can Qualify?

Many businesses across various industries can qualify for R&D. These industries include, but are not limited to:

  • Manufacturing
  • Technology
  • Pharmaceuticals
  • Engineering
  • Agriculture

How to Claim:

Claiming R&D involves a few essential steps:

  1. Identify Qualifying Activities: Determine which of your R&D activities qualify for the tax credit.
  2. Document Your Research: Maintain thorough records of your R&D projects, including the costs associated with each activity.
  3. Calculate the Credit: Calculate the amount of tax credit you are eligible for based on your qualifying expenses.
  4. Submit Your Claim: File your claim with the appropriate tax authorities, providing all necessary documentation and calculations.

Common Misconceptions:

  1. Only Large Companies Qualify: Small and medium-sized businesses can also benefit significantly from R&D tax credits.
  2. R&D Means Lab Work: R&D activities are not limited to lab-based research. They can include software development, engineering improvements, and more.
  3. Too Complicated to Claim: While the process can be detailed, there are many resources and advisors available to help you navigate the claim process.

Conclusion

R&D tax credits are a valuable resource for companies aiming to innovate and grow. By understanding and leveraging these credits, businesses can reduce their tax liabilities, reinvest in their development efforts, and maintain a competitive edge in their industry. If your company is involved in any form of research and development, exploring R&D tax credits could provide substantial financial benefits.

For more detailed information and guidance on claiming R&D tax credits, consider consulting with a tax professional who specialises in this area. Investing time in understanding and applying for these credits can significantly impact your business’s financial health and innovative potential.

payment on account money

What Is A Payment On Account?

Posted on | by Jade Donno


What Is A Payment On Account? Understanding the UK Tax System

A common source of confusion in the world of taxes, especially for those new to self-employment in the UK, is the ‘Payment on Account‘ system. With this post, we aim to demystify this concept for you in simple and easy-to-understand terms.

What Is A Payment On Account?

A ‘Payment on Account‘ is a tax payment made twice a year by self-employed people in the UK to spread the cost of the year’s tax. It’s a method used by HM Revenue and Customs (HMRC) to collect Income Tax and Class 4 National Insurance Contributions if you’re self-employed.

Why Do We Have Payments On Account?

These payments are essentially a way for the tax system to keep up with our fast-paced, modern world. Instead of waiting for the end of the tax year to pay all your tax in one go, Payments on Account split the bill into two smaller, more manageable amounts. This system helps prevent taxpayers from falling into significant tax debt.

When Are Payments On Account Made?

Payments on Account are made twice a year – on 31st January and 31st July. The first payment includes any unpaid tax from the previous tax year. The second payment acts as a ‘payment on account’ towards your next tax bill.

How Are Payments On Account Calculated?

Each Payment on Account is calculated as 50% of your previous tax year’s Income Tax and Class 4 National Insurance bill. These payments include a projection of your next year’s earnings, so they assume that you will earn a similar amount to what you did in the previous year. If your income significantly changes from one year to another, you can request to reduce your Payments on Account.

What About The July 31st Payment On Account?

The second Payment on Account, due by 31st July, is exactly the same as the first one paid in January. The total of your two Payments on Account is then deducted from your final tax bill for the next tax year. If your Payments on Account total more than your final tax bill, HMRC will repay the difference.

A Real-World Example of Payment on Account

Let’s say you’re a self-employed graphic designer, and your tax bill for the 2022/23 tax year came to £10,000. This would be due on 31st January 2024. However, in addition to this, you would also have to make your first Payment on Account towards the 2023/24 tax year. This would be 50% of your last tax bill, so £5,000.

Therefore, on 31st January 2024, you would actually pay £15,000 in total (£10,000 for tax year 2022/23 and £5,000 as your first Payment on Account for tax year 2023/24).

The second Payment on Account for the 2023/24 tax year (another £5,000) would then be due by 31st July 2024.

When you complete your 2023/24 tax return, if you find out that your actual bill for that year is £11,000, you’ve already paid £10,000 through your Payments on Account. This means you only need to pay the additional £1,000 by 31st January 2025. But remember, on this same date, you’ll also need to make your first Payment on Account for the 2024/25 tax year, which would be £5,500 (50% of the £11,000 bill for the 2023/24 tax year).

This example demonstrates how the Payment on Account system works in a realistic scenario. It ensures that your tax payments are spread throughout the year, making it easier to manage your cash flow as a self-employed individual.

Key Takeaways

Navigating the UK tax system can be challenging, but understanding the Payment on Account system can make your tax life easier. Remember these key points:

  1. Payments on Account spread the cost of the year’s tax into two payments.
  2. Payments are due on 31st January and 31st July.
  3. Each payment is calculated as 50% of your previous year’s tax bill.
  4. If your income fluctuates significantly, you can request to adjust your Payments on Account.
Key take aways

In conclusion, a Payment on Account is a proactive method implemented by the UK tax system to ensure that self-employed individuals can manage their tax bills more effectively.

As always, if you’re uncertain about any aspect of your tax situation, it is highly advisable to consult with a tax professional. Happy tax planning!

jade and paul in a meeting

Are You in the Crosshairs of the Associated Company Tax Rates?

Posted on | by Jade Donno

We’re back with another blog post and this time we’re diving into a topic that isn’t everyone’s cup of tea – taxes. But don’t worry, we’re here to make it as enjoyable and straightforward as possible. Strap in and let’s demystify the new corporation tax rules together.

What are the changes?

As of April 1st, 2023 (and no, it wasn’t an April Fool’s prank), there have been some significant changes in the corporation tax laws. Here’s the lowdown:

  1. Companies with profits that are playing a bit of hide and seek and total less than £50k will continue to be taxed at the friendly rate of 19%.
  2. Those with profits feeling a bit more confident, between £50k and £250k, will be greeted by a still reasonable tax rate of 26.5%.
  3. And for those brave souls whose profits exceed £250k, they’re looking at a flat rate of 25%.

Now, you might be wondering about this £50k threshold we mentioned. It’s not as roomy as it first appears. Much like sharing a dessert, this threshold needs to be split between your company and any other associated companies. The effect? Well, your slice of the pie could be smaller than you initially thought.

Fear not, your trusted accounting partners, should be on the case and we’re here to guide you through this labyrinth. Your accountant will need to know about any other companies you’re involved with, either as a shareholder or director. The same goes for any companies your family members are involved with. This isn’t us accountants just being nosy, promise! It’s all to ascertain whether the associated company rules apply to you and potentially other connected businesses.

We understand that these changes may feel a bit like navigating uncharted waters. If this is going to cause any tax-related stress, rest assured that we’re prepared to assist. We can work with you to plan the most tax-efficient course.

So, let’s sail through these tax changes together. As always, we are committed to lightening the load of tax law changes and making the journey as smooth and pleasant as possible.

Stay tuned for more updates and remember to keep those smiles on. After all, nothing is as certain as change… and taxes!

what are capital allowances

What are capital allowances?

Posted on | by Jade Donno | Leave a Comment on What are capital allowances?

Are you ready for some capital allowances fun? 🙌 🥳

Yeah, we know it’s not the most exciting topic, but stick with us because it’s important. Capital allowances are like the superhero of the UK tax system, providing businesses with tax relief on certain types of capital expenditure. However from April 2023, they’re changing! 

Super Deduction

First up, we have the Super-Deduction. This is a type of capital allowance that provides businesses with a 130% tax deduction on qualifying investment in new plant and machinery. That’s right, you heard us, 130%! It’s like getting an extra boost of power to your capital expenditure. This is designed to help businesses invest in new equipment and machinery, and has been a game-changer. 

But you better act fast because the Super-Deduction is only available for investments made between 1 April 2021 and 31 March 2023. So, if you’re planning to upgrade your plant and machinery, make sure to take advantage of this superpower before it’s too late. 

Special Rate Pool 

Next up, we have the Special Rate Pool, which is used for assets that are eligible for a lower rate of capital allowances. While it’s not as exciting as the Super-Deduction, it’s still an essential part of the capital allowances world. From April 2023, the rate for the Special Rate Pool will be reduced from 6% to 3%. It’s not ideal, but hey, we can’t win them all. 

Annual Investment Allowance

Moving on to the Annual Investment Allowance (AIA), which provides businesses with 100% tax relief on qualifying investment in plant and machinery, up to a certain limit. The good news is that the AIA limit is staying the same at £1million of capital expenditure. 

General Pool Allowances

Last but not least, we have General Pool Allowances. This allows businesses to claim tax relief on assets that don’t qualify for the AIA or exceed the AIA limit. From April 2023, the WDA rate will be reduced from 18% to 16%. It’s not a significant reduction but still something worth being aware of.  

In conclusion, the world of capital allowances is evolving from April 2023. But, as with any superhero story, there are some ups and downs. The Special Rate Pool and General Pool Allowance are getting a little weaker, while the super deduction is leaving us. So, make sure to plan your capital expenditure carefully and consult with a tax professional to ensure that your business is making the most of the available allowances. 

Marriage Allowance

Posted on | by Jade Donno

As we are in the middle of wedding season, it’s worth reminding everyone about marriage allowance. This extra bit of tax relief could be especially helpful to people now during the cost of living crisis.

What is marriage allowance?

Marriage allowance lets you transfer 10% of your unused personal tax allowance to your husband, wife, or civil partner. This will then reduce their tax bill by that amount. It could be worth up to £252 a year!

Am I eligible?

To be eligible to marriage allowance you need to be;

  • Married or in a civil partnership
  • one partner earning below the personal tax threshold of £12,570 per year
  • The other partner earning below the higher rate tax threshold of £50,000 per year

Unfortunately you can’t claim marriage allowance if you are only co-habiting and not married or in a civil partnership.

How do I claim marriage allowance?

If you are a client of ours, mention that you would like to apply for marriage allowance when we complete your tax return. We can then help you sort this out.

You can also apply yourself by phoning the income tax helpline on 0300 200 3300 or by applying online. You will need your partner’s national insurance number for the claim.

There are some online firms that will charge you a commission for claiming through them, our advice is to stay away from these and to either claim yourself by contacting HMRC or through your accountant. We do not charge our clients extra for this. This will ensure you get 100% of what you are owed!

Can I backdate my claim?

When applying for marriage allowance you can backdate your claim to 5th April 2018! So if you have been eligible for marriage allowance since then, these tax years will be included in your claim and you could receive more money back.

If you are married and not already taking advantage of the marriage allowance then what are you waiting for! Make sure you apply to receive your tax refund.

Payments on account

Posted on | by Jade Donno

If you complete a tax return you may have to pay your tax twice a year. This sounds like it should be bad, but it can be a helpful way of spreading your payments throughout the year.

What are payments on account?

Payments on account are made twice a year and are payments that you make towards your next tax bill. It is a way of bringing the tax collection closer in line with those who pay their tax monthly through PAYE.

Who has to pay?

If the tax liability on your last submitted tax return was over £1000 then you will automatically be set up for payments on account.

When do I have to pay?

You pay twice a year with payment deadlines on January 31st and July 31st however you can pay before these deadlines.

How is it calculated?

HMRC will use your previous tax bill to estimate how much tax it thinks you will be paying next year. It will then half this amount and charge you this in January and July, so in the following January you only have to pay what is left over, if any, and potentially the next payment on account. If you have overpaid, you will receive a refund, or if completing your tax return close to the deadline it will be deducted from the next payment on account.

Can you reduce how much you pay?

If you think your taxable income will reduce for the following year you are able to apply to reduce your payments on account.  They can be reduced through your tax return or via an HMRC online account by either your agent or yourself.  Payments on account cannot be reduced by too much as if your tax liability is higher than the reduced amounts when your actual tax return for the year is complete HMRC will charge interest for the underpayments and potentially penalties.

If you have collated your information for the year prior to the July second payment on account deadline the filing of the actual tax return can replace the estimated tax due if the tax liability for the year is lower than the prior year.

New to self assessment? – watch out

If you are new to self assessment or have never paid payments on account before it’s worth putting money aside throughout the year so that you don’t get caught out.  This is because the first time you become part of the payment on account regime you could have to pay 150% of the tax liability in January.  This would be 100% of the tax from the prior tax return and 50% again for the following tax return. This first experience can feel like a shock, but it will make the next payment in the following January easier.  This is because you would have already paid 100% of the prior year’s tax to deduct from the total.

How to pay

Simply log in to your government gateway and follow the instructions. Alternatively you can pay by phone, bank transfer or a number of other different way. The details of this will be on the letter you receive from HMRC, or on the HMRC payment guidance online.

We hope this helps clear up some of the questions regarding payments on account. Your government gateway account will always show your upcoming payments so we really do recommend setting one up. If you have any other questions regarding payments on account just give us a call and we will be happy to help.

Why sole traders need a separate bank account

Posted on | by Jade Donno

If you are just about to become a sole trader, or have been one for a while, you might be wondering whether it is worth getting a separate bank account for your business. There is no legal requirement for sole traders to have a separate bank account for their business unlike Limited Companies which are required to do so. This is because HMRC views Limited Companies and the Directors as separate legal entities, whereas sole traders and their businesses are viewed as the same. Therefore a Limited Company is required to keep its bank accounts separate from the personal accounts of the directors. For more information about the differences between these two business structures read our blog.

We usually recommend that all of our sole trader clients get a separate bank account for their business. Here are some of our reasons:

1) It makes your accounts more accurate

Having a separate bank account for your business income and expenses has the obvious advantage of being able to keep any other income and private expenses separate. This will stop any chance that they could become mixed up or confused which will in turn ensure that your bookkeeping and accounts are accurate.

2) It stops you missing anything

Similarly, if all of your business expenses are in one account then you know you will not miss anything. It can be very time consuming to go through your personal account and pick out the transactions that relate to your business, so with a separate account you (or your bookkeeper) will not have to do this!

3) It helps to keep your numbers up to date

If you have your accounts separate and your bookkeeping up to date then you will have a better overview of how your business is performing.

With a personal account, you may not be able to get as clear a view of what your numbers are which could lead to making incorrect business decisions.

4) It makes HMRC inspections easier

In the event that you get an inspection from HMRC, the first thing they will look at is your business account. This means that you won’t have to hand over your personal bank statements to them in the first instance. This process is likely to be a lot more straightforward if HMRC only have one bank account to look through.

5) It makes bookkeeping in Xero easier

We can set your Xero up so that it has a bank feed running to your sole trade bank account. This will mean that we won’t see your personal transactions or need you to send in bank statements for any other account. This could also save you money as our bookkeeping service includes up to 50 transactions per month. Using a personal account is likely to put you over this!

We recommend…

Some banks may charge a monthly fee for a business bank account. You don’t necessarily need to have a specific business bank account set up, however some banks do specifiy in their terms and conditions that you cannot use a personal account for “business use”.

Some banks however do specific bank accounts for sole traders, and don’t charge a monthly fee! We particularly like this one from Starling Bank https://www.starlingbank.com/sole-trader-bank-account/

(We are not affiliated with Starling Bank)

As you can see, it makes so much sense to keep a separate bank account for your sole trade business. It will save you & your bookkeeper time and hassle and make sure that you don’t include or miss anything important from your accounts.