How to Open a Business Bank Account When You Go Self-Employed. A business bank account will simplify your business administration. Here’s how to find one that works for you.
Whether you are planning to visit a branch or apply online, you will need identification (like a driving licence or passport) and need to provide a little information about what you do. You may also be required to make a deposit to open the account.
Here’s what to expect during the business bank account opening process and a little more about what you need.
What is a Business Bank Account
A business bank account works much like your personal bank account. Except that they money that goes in and out relate purely to your business.
Often business bank accounts have different types of benefits and perks attached to them. These are designed to benefit you from a work perspective.
Do You Need a Business Bank Account if You’re Self-Employed
In my opinion, yes you do (and it’s recommended by HMRC).
Opening a separate business bank account will help you manage your business finances, offer you some protection and add to your credibility.
Still not sure? Then read this to help you decide.
How to Open a UK Business Bank Account
With over 4 million people self-employed in the UK, its easier to see why there are so many options for business banking available, either online or on the high street.
But what this does mean is that it can be pretty confusing when it comes to picking one.
Each one offers something slightly different so it can be hard to know where to begin.
How to Choose a UK Business Bank Account
Here’s what you need to ask yourself before jumping in and signing up to a business bank account:
- Do you need to make & receive international payments? There is generally a bank charge for arranging overseas payments. You should check the costs of making and receiving payments.
- Do you need to deposit cheques from customers? Then it will make sense to check there is a physical branch near you so you can do your banking.
- Do you need to withdraw cash for your business bank account? With some accounts this can also attract charges.
- Is the mobile banking app user friendly? Banking apps are useful so make sure the business bank account your choose has an app you’ll find easy to use. Being able to check payments and pay suppliers easily will save you a lot of time
- Do you need Business borrowing or overdraft?
Business Current Account vs Deposit Account
If you are trying to decide exactly which type of account you need, then here are some of the basics of business bank accounts and what you should be looking for in each.
|Business Current Account||Business Deposit Account|
|Why choose it:||Pay bills;|
Pay for your expenses with a debit card.
|Save money for your business and future growth;|
Set aside tax or VAT money.
|What to look for:||Low/no monthly charges;|
Low/no transaction charges;
Low foreign transaction charges (if you travel for work);
Debit card for the account;
Easy cash withdrawals.
|High interest rates;|
No monthly charges.
What You’ll Need to Open Your Business Bank Account
Regardless of whether you go online or into a branch, you will need to provide certain information so that the bank knows who you are.
This is all to do with money laundering requirements or what the bank called KYC ‘Know Your Customer’ Checks.
Some high street banks allow you to apply online, but will still require you to go in branch to complete the sign-up process as part of KYC.
Opening a business bank account involves quite a bit of paperwork so be prepared. Here is some of the information you will definitely need to have ready:
- Proof of your identity with a document such as a passport or driving licence.
- Proof of your address with something like a driving licence, recent bank statement or mortgage statement
- Details of your business, its trading name and address
- A brief description of what your business does, expected turnover and an idea of money coming in/going out
- Your own personal details such as name, address, phone number, date of birth and residential status.
She is the creator of the ‘Go Self Employed’ website, which is her corner on the internet where she makes self-employment less terrifying.
Latest posts by Anita Forrest (see all)
- Maternity Allowance for the Self-Employed Explained - 12th August 2019
- How to Leave the Flat Rate VAT Scheme - 8th August 2019
- VAT Margin Scheme for Cars Explained - 6th August 2019