One of the first things you need to organise when starting a business is a dedicated business bank account. To help you get off to the best start, we have compiled this guide to sole trader bank accounts. Whether you are looking for your first business account or a new sole trader business bank account, we can help.
As a sole trader, you do not legally need to open a business bank account. If your business was instead registered as a limited company, legally you would need to open a bank account. This is because your business and yourself, would be classed as separate legal entities. Although you may be able to use your personal account for your business, there are many benefits to separating them.
Not only will you benefit from simply accounting and tax calculations, your business will have access to numerous banking features. You will also appear more professional, with customers able to pay you directly through your business name. If you use your personal account for business, you would be at risk of the bank closing your account.
If you are searching for your first sole trader bank account or a better account, there are many options available. To help you find the best account for your business, firstly you need to decide which features you require. For example, do you need high-street branches, a mobile app or an overdraft? By making a list of the more important banking facilities, you can then compare your options.
To help you compare bank accounts, we have developed our innovative comparison service. Our quick filter tool will allow you to compare a variety of high-street and new online banks, to find the ideal account.
Once you have a list of potential accounts, you will be able to compare monthly account fees, features and benefits. It is always advisable to think about the overall account cost. For example, if a bank offers a free account, they may charge for some of your most popular transactions. Whereas, a bank charging a small monthly fee, could offer some free transactions.
To help you find the best bank account, you also need to consider factors other than the cost. For example, some banks offer a range of benefits which your business could find particularly useful. These include, credit facilities, business support managers, integrated account software and free foreign transactions.
Once you have compared options and found the ideal account, our link will take you to the bank’s website. Most banks offer a form of online application, although only online banks offer a complete online application process. The form will ask for both business and personal details, including:
You will also need to provide proof of identification and proof of address. To speed up the process, it can be useful to have these to hand. The time it takes to open an account will vary between banks, although some online banks provide instant accounts. These accounts do not require a credit check and are designed to be quickly accessible to businesses.
If you already hold a sole trader account and are looking to switch, you may benefit from the 7-day switch scheme. Many banks are part of the scheme which guarantees that your account will be switched across within just 7 days.
If you would like to find out more about comparing your businesses financial products, please contact our team today.