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Do I need a business bank account?
Read time: 2 mins Added date: 20/10/2023
It makes it easier to manage your finances if you open a business bank account. You’ll also get access to services and products you that won’t get with a personal bank account.
Who needs a business bank account?
A business bank account is one that you use solely for your business income and expenses. If you have set your business up as a limited company then you must use a business bank account to run it. While sole traders are not legally required to set up a business account, it can be a useful way to keep your business and personal finances separate and access support to help your business thrive.
What are the benefits?
- Easier to organise your finances
Keeping your business expenditure separate will save you time and effort when identifying supplier and customer payments. It’ll also help you track your business expenses to offset them against tax. - Helps with tax and VAT
It is also easier to work out if your company is paying the right amount of tax. What’s more, you can link your business account to accounting software, which takes some of the stress out of doing your tax returns. - Build a credit rating for your business
Using your business account will give you a credit history for your business. This can be helpful later if you need additional investment such as a loan or other type of finance to help your business grow. - Designed for business
Initially you might only use your account to make and receive simple payments. But in time you could need more complex banking services, like bulk payments, payroll or international payments. You can add these services to a business bank account as and when you need them. - Access the expertise and services you need
Business banking experts can give you information about other business products and services to help you make informed choices for your business as it evolves.
What to consider when choosing a business bank account
- Fees and charges
Unlike personal bank accounts, you will need to pay a monthly fee for a business bank account and there may be other charges for specific services. Many providers will waive the monthly fee for a year as an introductory offer to give you a helping hand. - Ways to bank
Being able access your business bank account when you need to, either online or using an app, is important. If you’ll need to deposit cash regularly, then consider whether you’ll need to visit a branch too. - Business support
Think about what assistance you might need as you grow and whether your business bank account provider can support you with your specific goals.
Looking for a business bank account?
Find out more about the bank accounts we offer for small businesses and start-ups.