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Find the right accountancy solution for your requirements

it can be difficult to know where to start when it comes to finding the best business bank account for your needs; that’s why we’ve put together this guide to help answer some of the questions you might have when it comes to finding a bank account for your contracting business.

 

Do I legally need a business bank account?
As a sole trader, you don’t need a dedicated business bank account. You could just use your personal current account or joint account. We wouldn’t advise that though, and we’ll tell you why a bit further down this article.

If you’re set up as a limited company or a partnership, then it is a mandatory requirement to have a business bank account. This is due to the business being a legally separate entity.

 

As a sole trader, can I just use my personal bank account?
Although you can legally use your personal account for your business as a sole trader, it’s recommended to have a dedicated account for any business transactions. Here are some of the reasons why it’s better to keep things separate:

  • It’ll make it easier to complete your tax return
    It will be much quicker to fill in all your details for HMRC if your incomings and outgoings are happening in one place. It gets a lot more time-consuming if you are having to differentiate legitimate business expenses and the family shopping.
  • It might be in your bank account T&Cs
    A large number of personal or joint current accounts have it written into their terms and conditions that you can’t use the account for business purposes. So, if your bank notices lots of business-like transactions taking place you might get an angry phone call and even the possibility of account closure.
  • It’s much more professional
    If you’re sending out your bank account details to clients and customers, it looks much more professional to have a business account set up. Also, some clients are not keen to pay into non-business accounts.

 

Do I have to pay a fee for business banking?
Unlike the majority of personal accounts, business bank accounts will usually charge a fee. However, you’ll find that many of account providers will waive the fee for the first one or two years (we’ve listed some of the very best in the next section).

For that fee, you’ll get all the usual bank account features such as online banking, direct debits, standing orders, and overdraft facilities. However, your business account will also be able to process customer card payments, access business-specific borrowing, and business credit cards.

Many high street banks will also provide you with a dedicated business banking advisor at your chosen branch. This is less important than it was in the days before the internet, but some people still prefer that face to face interaction.

 

What are the best business bank accounts?
As you’d expect, there is a huge range of options when it comes to selecting a business account. We’ve put together a list of some of the best here. Of course, it is not exhaustive, but it gives you a good starting point to explore from.

First up are the Easy Accountancy business banking partners. You can find our partners and request a callback all from within our supplier directory.

 

  • Cater Allen
    Specialist business bank Cater Allen offers tailored bank accounts to business owners. The Reserve Account gives you loads of flexibility with no monthly or annual fees.
  • Metro Bank
    As with Tide, Metro Bank is a bit of a newcomer to the UK banking scene. But it offers clear, no-nonsense banking with transparent fees. Impressively, all Metro Bank branches are open 7 days a week, too.
  • Tide
    Business-banking newcomer Tide is a perfect choice if you want to set up a business bank account quickly and easily. You can get an account number and sort code in five minutes, all without a monthly fee.

 

And here’s the best of the rest:

  • Barclays Start-Up Business Account
    This account from high street big-hitters, Barclays, offers new businesses fee-free banking for 12 months. You’ll also get loyalty rewards and expert advice in the crucial early months of your new business. Find out more here.
  • Lloyds Business Current Account
    Another established name, Lloyds, gives new businesses 18 months’ free banking. They also offer a dedicated business banking app and a UK-based business management team. Get all the info here.
  • HSBC Business Bank Account
    As you’d expect from a brand like HSBC, its business banking offering is slick and competitive. With the Business Account you’ll get no fees for 18 months, a choice of two tariffs, and access to finance straight away. Check it out here.

 

Although this is only the start of your business banking education, we hope you’ve found our guide useful. If you’d like to get more news and articles on the world of contracting and running a business, sign up to our newsletter.

 

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