Choosing a business bank account
Separating your business banking from your personal finances is important. If you’re setting up as a limited company, you’re required to have a business bank account.
Why do I need it?
Having a business bank account can remove much of the day to day hassle of your business finances. With many banks offering a specialist advisor to help you through the complexities of your financial transactions, as well as offering you guidance when it comes to growing your business.
With charges and services varying between the financial institutions, choosing the right business bank account is vital for your company and can save you money.
The benefits of business banking accounts
If you’re a sole trader you may feel that mingling your business accounts in with your personal bank account could work. However, with various tax matters to take into account which differs between personal and business finance, keeping your money separate can ease the paperwork headache when it comes to filing your returns.
While sole traders could choose to open a separate personal bank account for their business, which will offer all the advantages of the better terms and perks associated with personal banking. Many people find business banking works better for them.
The benefits of business banking include:
- An Extra Degree Of Professionalism
When it comes to your transactions with other companies having a business account shows that you mean business – helping you to retain existing customers and to attract new ones.
- Proving Your Business Isn’t A Hobby
As only true businesses can deduct business expenses. Proving to HMRC that you aren’t just making a bit of money on the side from a hobby is important. Having a business account shows that you are being more professional in your approach.
- Accurate And Clear Bookkeeping
When it comes to filing your tax returns, having your business banking clean and separate can make the world of difference to your calculations. Making it much easier for you or your accountant to claim back everything you’re entitled to. It also makes auditing much more simple.
Selecting a business bank account
With so many different offers about for business banking, it’s worth shopping around for the best deal for your business.
Things to bear in mind include:
Many business bank accounts charge a small fee every time you pay in or withdraw money and you may also be charged a monthly or quarterly fee or standing charge.
Some banks will waive these fees for an introductory period and it’s worth looking at what deals are on offer.
As most business bank accounts have lower charges for online transactions it’s worth ensuring your selection offers internet banking. Overdrafts and the limits and charges involved will also need careful consideration, as will the level of support you get from your bank advisors.
- Other Perks
Take a look into what other perks are on offer for opening a business bank account. Some offer cash back once your account is opened, while others may offer accounting software and other benefits.
Registering your business and setting up your business banking
One of the first steps in setting up your new business is to register with Companies House. Until you’ve done this, you won’t be able to open your business bank account.
With The Formations Company your business can be registered quickly and easily, and with our business banking deal from Barclays, you’ll benefit from a dedicated service and an automated application process, plus £50 cashback from us when you open your account within 90 days of us incorporating your company. Please note only one claim can be made per business account opened within this specified time period.
For further information head to our help centre.