Here are 7 reasons why you need a business bank account:
1. You can keep your personal and business money separate
By having a business bank account you will separate your business money from your personal money. There will be no confusion and you will not be spending the business money for your personal needs and vice versa.
2. Taxes and VAT
Having a business bank account will make it easier to deal with your taxes and VAT. You will have a more clear view of transactions to enable you to deal with your deductions.
3. Accept international payments
If you want to trade internationally or accept payments from businesses abroad, then you will need a business bank account. You will not be able to do this from your personal account.
4. Have a more professional image
Having a business account gives your business a professional image. This is especially useful if you are in competition.
5. Easier to pay salary for staff
If you have a business account, then it will be easier for you to pay out wages for staff.
6. Buying from wholesalers and suppliers
If you are going to be buying stock from wholesalers and suppliers, then some of them will require you to have a business account.
7. Access to business finance and loans
If you don’t have a business bank account and only have a personal account to manage your business, you might not be able to get business loans for some lenders. Having a business bank account also good for your image.
Do I legally need a business bank account?
If you are a limited company you legally need a business account, but not if you are a sole trader. Here is further detail:
Limited Company / Limited Liability Company
If you are a limited company or a limited liability company, you are required to have a bank account. As, the business is a legal separate entity from you. It will have a director and could have shareholders. You would need to keep the financial dealings and accounts separate from your personal account.
If you are a sole trader you do not legally have to have a business bank account. You can use your personal bank account for your business. If you are self-employed, working by yourself or have a few people working for you, you can use your personal bank account to trade.
If you are a partnership, you are not required to have a business bank account, legally, but it is practical to have it. It is better to separate your personal money from the business money.
Business bank accounts
If you need a business bank account, here are some which you can open quickly and easily:
If you are interested in working from home, read our article: Work From Home – Jobs You Can Do.
If you would like more information about bank regulations, go to: Financial Conduct Authority (FCA).