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.


Set up a business bank account if you’re:

  • A limited company, registered with Companies House
  • A sole trader who wants to keep business and personal finances separate
  • Looking to make managing tax and VAT easier
  • Building a credit rating for your business credit
  • Planning to use additional business banking services in the future

What are the benefits?

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.  

Small business bank accounts

Did you find this business guide useful?

Important legal information

Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc, Lloyds Bank Corporate Markets plc and Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH.

Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.

Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is a wholly-owned subsidiary of Lloyds Bank Corporate Markets plc. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH has its registered office at Thurn-und-Taxis Platz 6, 60313 Frankfurt, Germany. The company is registered with the Amtsgericht Frankfurt am Main, HRB 111650. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is supervised by the Bundesanstalt für Finanzdienstleistungsaufsicht.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.