Tax benefits as a business

[ians]

Can anyone tell me what the advantages are of opening a sole prop bank account as apposed to an account in your personal name and just using it as a business account...ie Elite account for R100 per month.

I am told that the reason i should open an account as a business and not in my personal capacity is because i will pay more tax.

As a sole prop i am my business and everything to do with my business falls back on me personally at the end of the day.

[Justloadit]

Using the an account with the business name is better for large corporates to make payments, they may question the payment if it is in a persons name.

[dellatjie]

Whether your bank account is opened as Mr. A. Smith or as Mr. A. Smith trading as ABC Business, your tax rates remain the same.

A sole prop and an individual gets exactly the same tax rates, so I do not see how the name on your bank account or the type of account can influence your tax position.

[Basment Dweller]

The prob is personal income gets expensive when your income goes north of R600k/year which is why its better to register a company and declare income as dividends and expose to a different tax bracket. All depends on the amount of money you are making and the sources of income.

The bank accounts will just help you separate different sources of income and expenses and help organise your book keeping.

[BusFact]

I am told that the reason i should open an account as a business and not in my personal capacity is because i will pay more tax.

Depends what they meant by "business". If they meant a company, then there are some advantages, but paying less tax isn't usually one of them. If they meant a sole prop type of business, then you are right. Sole prop = you, so I don't see how that reduces your tax load either.

I'd be interested to know how the person who told you this, came to their conclusion.

[ians]

Bank employee, a business banker at one of the banks.

All i see are fees and more fees as "business" as an individual personal account less fees.