Small Businesses in the UK by Ben Lobel – Advice and Ideas for Small Businesses and Small Businesses in the UK
Choosing the right business bank account is an opportunity to get the basics of your business right the first time. Although it may be inconvenient to maintain separate accounts for both personal and business activities, it is recommended that you do so in order to separate your accounts.
Here we look at how to open a business bank account in the UK and what your options are there.
Benefits of having a business bank account
For most businesses, having a business bank account is a good idea. Even freelancers and one-man bands.
As a sole proprietor, you may want to open a business bank account for several reasons.
First, banks may designate personal accounts as for personal use only and threaten to close them if they find too many business-related transactions.
Second, if personal costs are mixed with business costs, it can be difficult to inform HMRC how much profit a business has made.
Finally, having a dedicated bank account can make your business appear more professional to your clients and partners.
It is important to understand the process of opening an account. Otherwise, you can waste a lot of time choosing the one that doesn’t fit your needs.
What documents and details do you need?
For businesses looking to open a bank account in the UK, the process is relatively straightforward, provided they meet the eligibility criteria. When opening an account, please prepare the following documents.
One document that proves your identity:
- A complete and valid UK or foreign passport
- your national identity photo card
- UK full paper driver’s license
- A full UK or foreign driver’s license with photocard issued by an EU or EEA member state
One copy of proof of UK address:
- Full UK driver’s license.
- A full UK or foreign driver’s license with photocard issued by an EU or EEU member state.
- UK or foreign bank or credit card statement (must be less than 3 months old and not printed from the internet).
- UK mortgage statement (within 12 months of issuance, not printed from the internet).
- City tax invoice, payment slip, or exemption certificate (must be less than 12 months old);
- A letter or bill from your utility company (within 6 months of issuance, avoid cell phone bills).
Business-wise, you’ll need:
- Company registration number (if you have one)
- Business details such as sales, tax information and other capital
- All company director or partner details (name, date of birth, address, national insurance number, etc.)
How to open a business bank account
The steps required to open a business account may vary from bank to bank.
We recommend starting by researching your options online. Whether online application is possible depends on the bank.
You will need to tell your bank if your business has foreign shareholders or directors and that you need a UK business bank account (rather than an international business bank account held offshore).
Once a bank account is opened, you are free to use your local bank branch for your daily banking activities.
For more information on how to open a business account in the UK from abroad, please contact your government contact. Investment in Great Britain and Northern Ireland hub.
Business Banking Monthly Fee
Business bank accounts typically have a monthly fee and users should be aware of this before opening an account. Most UK business bank accounts come with referral benefits such as free banking for 12-30 months.
These are tempting, but always check how much you will end up paying after the trial period is over.
In general, the more transactions you have on your account, the higher the fees can be.
How long does it take to open a business bank account in the UK?
It can take minutes or even weeks for your UK bank account application to be approved and a possible meeting to be arranged, so be sure to factor this time into your business planning process.
Some operators, such as Metro Bank, allow you to go directly to the branch on the same day to make an appointment. The digital bank promises a quick application as all procedures are done online.
best business bank accounts in uk
A variety of personal bank accounts are available in the UK, including High Street Banks. Barclays, HSBC, NatWest/RBS, Santander, Metrobank, TSB, Lloyd’s/Bank of Scotland.
However, it’s worth recognizing that the business account that best fits your needs may not necessarily be one of the big banks.
Newly established “challenger” banks such as Starling Bank and Tide may also be worth considering when looking at business account comparisons.
Remember that “best” is subjective and your business needs are paramount. For example, focus on the software you already use, such as your accounting platform. Matthew Boyle, Bank and Mortgage Issuer, finder, also advises thinking about how to receive payments. If you make a lot of payments by check or cash, it’s wise to use a large bank with a branch close to your company.
Below are the main accounts from both traditional banks and digital platforms.
traditional bank
digital bank
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Where are the best bank accounts in the UK?
12 Best Digital Banking Platforms for Small Businesses
This post was first published on Small Business UK Opening a business bank account – how-to’s and best accounts.
