Selecting the appropriate business bank account is an opportunity to establish your business fundamentals accurately from the start. While it may not be convenient to have separate accounts for your personal and business activities, it is best practice to keep them separate. In this article, we will explore how to open a business bank account in the UK and the available options. Owning a business bank account is beneficial for most businesses, including sole traders, freelancers, and one-man-bands. There are multiple reasons why a personal account is not adequate for business purposes. First, your bank may terminate your account if there are numerous business-related transactions. Second, if your personal expenses are mixed with your business expenses, it could be difficult to inform HMRC regarding your business’s income. Lastly, having a dedicated bank account enhances your business’s professionalism to clients and partners. Understanding the account opening process is critical to avoid wasting time on the wrong option. When opening a UK business account, you need specific documents to prove your identity and address, including your Companies House registration number, business details, turnover, tax information, and all partners’ details, including name, address, date of birth, and National Insurance number. It is best to research the options online and inform the bank if your business has foreign shareholders or directors and requires a UK business bank account instead of an international one held offshore. Traditional banking institutions charge monthly fees for business bank accounts, and it is essential to understand the rates before opening an account. Introducing new challenger banks, such as Tide and Starling Bank, into business account comparisons, could provide additional options. Several retail banks in the UK provide business bank account services, including Barclays, HSBC, Lloyds/Bank of Scotland, TSB, Santander, Metro Bank, and NatWest/RBS. Please take note that the ideal business account for your company may not be one of the high street banks. It typically takes several minutes to a few weeks for UK bank account applications to be approved, and scheduling meetings may be involved, so plan accordingly. Digital banks promise rapid application processes as everything is completed online.
© 2022 My i Life Media