When you first set up a new business the easiest option is to set up a business bank account at the bank where you hold your personal account. After all, you’ve been happy with them managing your personal finances, so why wouldn’t you want to open a business bank account with them? While that may be true, like anything in business, it pays to do a little bit of research to make sure you get an account to suit your business needs both today and tomorrow.
We take a look at all the things you should consider before choosing a business bank account.
If you have a limited company, then legally it’s considered to be a separate entity, so you have to have a dedicated business current account. This enables you to handle all your business finances separately from your personal current account.
If you are a sole trader or part of a partnership it isn’t compulsory for you to sign up for a business bank account; however we would recommend you seriously consider keeping your business and personal finances separate. This not only makes it easier to notify HMRC about your business income, but also enables you to easily keep track of your business income and expenses, which when it comes to submitting your self-assessment will make both you and your tax accountant very happy!
Also, with a business bank account you will easily be able to:
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With so many business accounts to choose from it can be hard to know where to start. Here are the main things you need to consider.
If you’re not sure which account is right for you, we are more than happy to help. As an Aylesbury accountant we work with companies of all sizes to help grow their business so have experience of finding the right bank account for the right business.
In the old days, your choice would have been limited to banks, such as HSBC, Yorkshire Bank or Co-Operative Bank, but nowadays the choice is much greater. In fact, you can even access a lot of bank accounts from your local Post Office!
Challenger banks, such as Monzo, Starling and Tide are capitalising on the trend of people using their phones to do their banking, so are focusing on digital technology and an excellent online experience to attract new customers. Some challenger banks, such as Metro Bank still have a high-street presence, but many are entirely digital.
Both high street banks and challenger banks are authorised and regulated by the financial conduct authority, so you won’t have to worry about your money being safe. But carefully consider the pros and cons of each and how you work as a business before committing to a provider.
The bank will need to carry out a number of checks to confirm your identity and those of any other directors registered with your business. This usually takes anything from 1 week to 4 weeks. However, it may be a bit quicker if you already have a current account with the bank or are a sole trader rather than a limited company.
To open a business account, you’ll be need to provide the following documentation:
As a local accountant we’ve helped many small businesses set up a business bank account, so if you need any advice or assistance, please get in touch. We’ll be delighted to help.
We help ambitous small business owners grow their personal wealth and achieve their ideal work/life balance.
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Office: 01296 662322
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Palmers Business Support was founded to help ambitous small business owners grow their personal wealth and achieve their ideal work/life balance. With accountancy as the central pillar of our offering, we take the view that timely accounts and efficient compliance is the bare minimum our cients should expect.
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