Choosing the right kind of banking service is a perfect opportunity to get the fundamentals of your business right from the start. While keeping a separate account for both your personal and business activities can be cumbersome, keeping your accounts clean is a good idea to do so. Here we're going to look at how to open a UK business bank account, and what choices are out there.
You would want to open a business bank account as a sole trader for a variety of reasons. Next, your bank may state that a personal account is for personal use only, and may threaten to close your account if you see a large number of transactions relevant to the company.
Second, if your personal expenses are combined with your business costs, you may find it difficult to tell HMRC how much money your company has earned. Lastly, having a dedicated bank account would possibly make your company look more professional to customers and partners.
Being aware of the process of opening an account is crucial, otherwise, you might spend a lot of time choosing the wrong one for your needs.
Opening a UK business account with a foreign entityIf your company has an overseas corporate identity, if it has a correspondent banking arrangement with a British bank, your home bank may be able to set up an account for you. Most major UK banks have so-called 'special' deposits, too.
These are specifically built for non-residents so if you don't have the documentation to prove your UK address, they 're a great choice. You can actually also apply online for a foreign account. The international bank accounts are sold by Barclays, Lloyds, HSBC and NatWest.
However, it might not be the best option for you to open a bank account from abroad or a foreign account. Quite often, you'll have to make a major initial deposit and commit to paying every month in a minimum sum of money.
In addition to these conditions, some banks will also charge you a monthly fee. This can make it difficult to open and run your bank account. Many limitations can also apply. You may not, for example, be able to close the account and move to a better offer until a defined period of time is up.
Thankfully, alternative finance providers have been rising in recent years to help solve some of those obstacles. With TransferWise 's free borderless account, businesses can freely trigger and convert foreign account data, and keep more than 40 currencies within the one unified platform.
Money is also often exchanged at the mid-market exchange rate, making them up to eight times cheaper for sending foreign payments than the banks. We are a perfect alternative choice for foreign companies seeking to set up an account in the UK, with exclusive international account information for the Eu, US, Eurozone and Australia.