Business bank accounts
I've had lots of questions this week about business bank accounts, so it's probably time for a blog post ...
Do I need a business bank account?
If you are trading as a limited company then yes, it is a separate legal entity and therefore legally has to have it's own bank account.
If you are trading as a sole trader (are self employed) then there is no legal requirement to have a separate bank account .. BUT .. it's good practice to as it keeps your business and personal transactions separate. If HMRC wanted to look at your business records then they would only need to see your business bank account and not your personal account (unless you've been up to something dodgy of course ..).
What do I need to think about when looking for a business bank account?
There are a few key questions you need to ask yourself:
- Do you need to borrow money?
- Will you have cash to pay in?
- Will all your banking be online?
If you think you will need to borrow money then you need to find a bank that lends to small businesses and that you will be able to arrange this either online or face-to-face (the days of a business manager for small businesses within the banks are gone and it is often difficult to have face-to-face meetings these days, but some banks will offer this).
If you will need to pay cash in then a bank local to you is essential, otherwise it just won't happen.
If all your banking is online and you don't need a branch handy then look to see what deals and offers are out there for the longest free business banking for start ups, or for the lowest fees, or for the ethics of the bank - whatever is key to you.
Can I change business bank account?
YES!! If you have opted for a period of free business banking, when that ends look around and see what deals there are - you might not get another period of free banking but you might find somewhere else has lower fees.