How to Open a Business Bank Account When You Go Self Employed

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Business bank account self employed

Opening a business bank account is not a legal requirement, but it is recommended by HMRC.

I also strongly recommend that you open a business bank account if you’re planning to go self employed.

What is a Business Bank Account?

A business bank account works much like your personal bank account. Except that the money that goes in and out relate purely to your self employment business.

Why Open a Business Bank Account if it’s Not a Legal Requirement?

A lot of self employed business owners choose to open a business bank account, here’s why:

1. You’ll Save Tax

It’s easy to forget about little business expenses you pay for personally. Getting a business bank account with a debit or credit card means you’ll always have a record of every expense you pay for.

It all counts towards bringing down your tax bill.

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2. You’ll Look More Professional

Your business bank account will contain your business name and it’ll help you look a lot more professional and credible in front of your customers.

3. It’ll Make Your Bookkeeping & Taxes Easy

Keeping all your business transactions separate will make working out your taxes much easier.

Most bank accounts not connect automatically with bookkeeping apps like Quickbooks and Freeagent. They pull every transaction over for you and even try to categorise them then estimate your tax in real time.

How to Open a UK Business Bank Account

With over 4 million self employed people in the UK there are plenty of business banking options out there.

But what this does mean is that it can be pretty confusing when it comes to picking one.  

Here’s what you need to look out for when choosing a business bank account:

– Hidden fees

Many banks offer introductory offers but then have complicated fee structures once their offer expires or hidden charges on certain transactions.

Whichever you choose, make sure you are clear on what you will pay on each transaction and if there is an ongoing service charge fee.

– Time Consuming Paperwork

Historically opening a Business Bank Accounts always involved waiting for high street banks to get back to you, questioning your every intention and loads of paperwork. 

Whoever you approach for your banking check the process for opening the account is before you get started.

– Integrations

Check the bank account you choose integrates with your choice of bookkeeping software.

Being able to link your banking and bookkeeping will save you loads of time, as well as money if you choose to hire an accountant.

UK Challenger Business Bank Accounts for Self Employed

– Keep It Simple

When you go self employed you’ve got better things to do than deal with paperwork for banks. So keep it simple by opting for an online bank account like Tide.

Tide Banking are an online banking option. Its key features that make it worth checking out are:

  • Designed with the self employed in mind;
  • Offers an easy sign-up process through their app that takes less than 10 minutes;
  • It’s completely free to sign up to;
  • Have a simple pricing structure with no hidden costs – just 20p on transfers and £1 on cash withdrawals;
  • Offers a free trial of 50 free transfers for you to test the product, just click this link to sign up.
UK Challenger Business Bank Accounts for Self Employed

Accountant In Your Inbox

I'll help you to make more profits, pay less tax and stay on the right side of the rules. Enter your email address to connect with me!

No spam ever. Unsubscribe at any time. Powered by ConvertKit