Business Bank Accounts
As a director of a limited company, it is essential to separate your business from your personal affairs and this means you MUST open a business bank account in the name of your limited company to receive and make payments to and from your company.
In many cases, the simplest way to open a business account is to approach your own bank – they know you and this can help speed up the process. You will probably need to set up a meeting with your bank and provide them with your company’s Certificate of Incorporation for them to open the account.
In certain circumstances it may not be possible for you to open a business account with your own bank or you may not want to:
- You don’t have a UK account
- Your bank doesn’t offer business accounts
- Your bank charges too much for business accounts
It is for these reasons that we have partnered with Cater Allen Private Bank (part of Santander) to provide business accounts for our clients.
We have a master account arrangement with Cater Allen which allows us to provide you with a pre allocated account number once your company has been incorporated. We will complete the application on your behalf and you will be sent the account details, cheque book etc in the post.
Why you need a business bank account
There are many important reasons for setting up a business bank account if you’re working as a contractor. If you’re operating as a limited company, you’ll be legally obliged to use a business bank account, but it’s also a very good idea to open one even if you’re a sole trader or freelancer.
Your personal account could be closed
Your bank’s T&Cs may actually tell you that your account is designed for personal use. If it is being used for business reasons, the bank could close it down and instruct you to open a business one. Opening a business account can also deliver the transparency you need when dealing with HMRC.
Simplify things and boost your image
When business and personal purchases are lumped in together, it can become much harder to identify what your business costs are. As a result, your tax return could become tough, as well as time-consuming to complete.
Using a business bank account can also make you look far more professional when your clients and customers ask for your details. Some clients aren’t happy about paying into what appear to be personal accounts. The more professional you look, the more prestigious clients will want to do business with you.
Do more with your account
Once you open a business account, you can start thinking about things like obtaining business credit cards, borrowing money for your business and accepting card payments. You will normally need to pay a small monthly fee to use a business bank account, and you may be met with other modest costs.
It’s common for banks to let you use your business account for free for the first year or so. If you’re dealing with a large number of transactions, plan to become a limited company and your income and expenses have become more complex over recent years, it’s definitely time to start thinking about opening a business bank account.