Hello, and welcome to this question of the week from OnPoint Accounting.
This series of short videos is to help explain different answers to different questions that we get regularly at OnPoint Accounting.
OnPoint Accounting is an accounting firm, based in Scotland, supporting clients across the UK. If this video is helpful, then make sure you subscribe to our channel and that way you’ll get updates when we release further content for you.
The question of the week this week is, do I need a business bank account?
Now, we get this question quite a lot from new businesses that are starting up. If you’re a limited company, you have to, by law, have a dedicated business bank account. That is for a limited company, but if you’re a sole trader, there’s no law compelling you to do this. However, it is best practice for you to have your own business bank account. One of the main reasons we find clients don’t want to have a business bank account, is because of the cost involved.
Traditionally, High Street banks will charge you a monthly fee for holding the bank account. They may charge you transactional fees for money coming in and out of your bank. They may charge you more for foreign payments, compared to UK payments and various other charges that they like to lump in. However, with the most recent updates from our Challenger banks that are built online, such as Starling and Tide, there is no reason why you shouldn’t have a business bank account now. Business bank accounts with Starling, for example, are totally free, unless you’re depositing cash. With free banking from the likes of Starling Bank, there’s really little reason not to have a business account for your business. But, in case you need a final bit of convincing, having a business bank account makes doing your accounts a lot easier because you’re not having to try and figure out which transactions are personal and which ones are for business.
But a major factor to consider when you’re deciding whether you should or shouldn’t have a business bank account, even though it’s now free, is that in the last three months, the government’s provided multiple versions of grants and the banks have provided loans, all tied to support the coronavirus economical impact. All of these grants and loans however, have required you to have a business bank account and many people have lost out on the potential to apply for this funding because they didn’t have a business bank account. By setting up a business bank account with the likes of Starling, you’ll easily be able to apply for these grants in future, should the same incident occur.
If you’re interested in signing up with Starling, to get a free business bank account for a sole trader or limited company or a partnership, there’s a link to sign up in the description of this video. The answer to our question today, of do I have to have a business bank account, is yes. What reasons can you find not to anymore, now that we have free banking and the multiple grants and loans over the last three months have been dependent on you having a business bank account. We hope this short video has helped you. If you’ve got any questions that you’d like answering by the OnPoint Accounting team, please send them in via comments on this video or via email to info@OnPoint Accounting.co.uk, Or visit our blog at OnPoint Accounting.co.uk, where we’ve already got lots of blogs on these different subjects. Don’t forget to subscribe to the channel if it has been helpful so you get notifications of future videos. Thank you very much.
Looking for a bank account that’s free and easy to use? We use and love Starling Bank, use this link to sign up. https://bit.ly/2xvAddZ
Looking for multiple bank accounts at a low cost? We use and love Tide Bank, use this link to sign up https://bit.ly/2KTfIe3
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