Choosing the right kind of banking service is a major opportunity to master the basics of your business from the start. While it can be inconvenient to maintain a separate account for your personal and business activities, it is recommended that you do so to keep your accounts clean. Here we will see how to open a UK business bank account and what options are available.

The advantages of having a professional account

Having a business bank account is a good idea for most businesses; even freelancers and one-man-bands.

As an individual entrepreneur, you may want to open a business bank account for several reasons. First, your bank may specify that a personal account is for personal use only and threaten to close your account if it sees a large number of business transactions.

Second, if your personal expenses are confused with your business expenses, it might be difficult for you to tell HMRC how much your business has earned. Finally, having a dedicated bank account is likely to make your business appear more professional to your customers and partners.

It is important to know the process of opening an account, otherwise you could waste a lot of time choosing the wrong account for your needs.

Opening a UK business account with a foreign entity

If your company has a corporate identity abroad, your home bank may be able to set up an account for you if it has a correspondent banking relationship with a UK bank. Many large UK banks also have so-called “international” accounts.

These are designed specifically for non-residents, so they’re a great option if you don’t have the documents to prove your UK address. In fact, you can even apply for an international account online. Barclays, Lloyds, HSBC, Santander and NatWest all offer international bank accounts.

However, opening a bank account from abroad or an international account may not be the right choice for you. You may need to make a large initial deposit and commit to paying a minimum amount of money each month.

Some banks will also charge you a monthly fee in addition to these requirements. This can make your bank account expensive to open and manage. There may also be other restrictions. For example, you might not be able to close the account and upgrade to a better deal before a set period has expired.

What documents and details do I need to provide to open a business bank account?

For businesses setting up a UK bank account, the process is relatively straightforward as long as you meet the eligibility criteria. Make sure you have the following documents handy when opening your account:

  • Proof of identity. All appointed business managers will need it. You can use a passport, national identity card or driving license with photo.
  • Proof of address. It could be a utility bill or a recent bank statement. You can also use a council tax statement.

You may also need to provide the following information about your business:

  • Full business address (including postcode)
  • Contact details
  • Registration number at the Maison des Sociétés (for public limited companies and partnerships)
  • Estimated annual turnover
  • In some cases, you will need to prove your personal financial situation, along with documents proving that you have a clean banking and credit history.

How to open a business account in the UK

The steps to open a business account may vary from one bank to another.

It is advisable to first research the options online. The ability to apply online depends on the bank.

You should inform the bank if you have foreign shareholders and / or directors in your company and you need a UK business bank account (rather than an international business bank account held overseas) .

When the bank account is opened, you are free to use your local bank branch for your day-to-day banking needs.

For more information on opening a UK business account from overseas, you can contact the government’s Invest in Great Britain & Northern Ireland center.

Best Business Bank Accounts in UK

There are a variety of retail bank accounts available in the UK including major banks: Barclays, HSBC, NatWest / RBS, Santander, Metro Bank, TSB and Lloyds / Bank of Scotland. But it’s worth knowing that the best business account for your needs might not always be with one of the big banks. When looking at business account comparisons, it may also be worth considering newer “challenger” banks such as Metro Bank or Starling Bank. Here are the main advantages of each banking option:

Barclays

  • App with free billing function
  • Free business account for the first year and offered with a choice of financing options
  • Offers a business start-up account with free business banking services for the first 12 months, and a business account set up with two simple pricing plans

HSBC

  • Active in 64 countries
  • If you bank with HSBC in your home country, they can help you open a UK account before you arrive here.
  • Range of professional bank accounts available
  • Businesses with a turnover of no more than £ 2million receive an annual review to ensure the best standard rate for their business

Lloyds / Bank of Scotland

  • 12 months of free daily banking services
  • Two business accounts with a range of tools, including management advice and accounting software

NatWest / RBS

RBS and NatWest’s offerings are largely mirrored.

  • No minimum monthly fees
  • Several professional accounts to choose from, depending on the size of your business
  • FreeAgent Online Accounting Software

Santander

  • Earn up to £ 300 cashback per year
  • Low monthly fee of £ 5 for start-ups for the first 18 months

Metro Bank

  • A professional bank account for small and large businesses
  • No monthly fees if you keep your bank balance at £ 5,000 or more (£ 6,000 as of September 2021)
  • Access a local sales manager when you open your account

BST

  • Free business banking services for 25 months
  • Free Square card reader
  • Free access to Enterprise Nation digital advice

Virgin money

  • Free everyday banking services for 25 months
  • No monthly account fees
  • Earn cashback on your debit card purchases

Monzo

  • Fully regulated
  • Accounting tool integrations
  • Integrated billing and digital receipts

Starling Bank

  • Fully regulated
  • No monthly fees or UK payment fees
  • Free UK customer support 24/7 via app

Revolution

  • Holds money in 28 currencies
  • Convert at real exchange rate
  • Create unlimited accounts

Tide

  • Order up to 35 business expense cards
  • Three account plans based on your business needs
  • Send, pay and track invoices

For a more in-depth look, read What are the best UK business bank accounts?

Monthly business banking fees

It is common for monthly fees to be charged for business bank accounts and users should be aware of this before opening an account. Most UK business bank accounts come with an introductory offer such as free banking for 12 or 18 months. While these are tempting, always make sure you know how much you’ll end up paying once the introductory period is over.

As a general rule, the more transactions you make on the account, the higher the fees are likely to be.

Some business current accounts require ongoing monthly or regular quarterly fees. This will usually cost you between £ 15-20 per quarter, but many accounts don’t charge this fee at all.

How long does it take to open a UK business bank account?

It can take anywhere from a few minutes to a few weeks for a UK bank account application to be approved and any meetings to be arranged, so be sure to factor this time into your business planning process. .

With some operators, for example Metro Bank, it is possible to go to a branch and make an appointment that day. Digital banks promise a quick application process, as the process is done entirely online.

Business bank accounts for non-UK residents

More and more foreigners wish to open or are opening businesses in the UK, where they may also wish to have a corresponding UK bank account.

Non-UK residents who do not have the necessary identity documents may still be successful in opening an account, as in recent years banks have shown more flexibility in which documents they will accept. as proof of address.

Opening a professional account as a non-UK resident

You do not need to live in the UK to open a UK corporate bank account, although it is advisable to acquire UK residency before applying as some banks will only accept an application if they have a UK residence.

To open a UK business bank account you will need two documents, one to prove your identity (usually your passport or national ID card) and one to prove your address, which applies to both agency and online.

It is usually easier to open a bank account with one of the biggest banks in UK namely Barclays, Lloyds, HSBC. This is because they have a lot of experience with non-residents so they can be flexible with their requirements.

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