When you are running a company in the UK you are not legally required to have a particular business bank account. But you'll find it important to keep clean accounts. Thankfully there are plenty of banking choices and the procedure is relatively straightforward.
Can you open an online Business Bank account?
Most high street banks require you to show your ID and identification in person, which makes it difficult to open a full online business bank account. For certain instances, you can start the application online or by phone, but at a later point, you will need to send documents to the division.
Alternative finance options, such as business account Cashplus, are available online, however. Cashplus specializes in prepaid credit cards but also has a product that looks like a business bank account that can be set up entirely on the internet. However, read the small print carefully-you will find the choices here more restrictive than other commercial banking items on the market.
Which bank should you pick?
The UK has immense retail and commercial banking market, dominated by the 'Big Four':
- HSBC Inc.
- Lloyds Community Banking
- Royal Bank of Scotland Corporation (RBS)
Every bank may have available slightly different products so carefully read the terms and conditions.
HSBC is truly a multinational bank, with 4400 offices in more than 7 countries worldwide. In the UK they include limited corporations, associations, sole traders and charities with business accounts. Account fees for new customers are £5.50 a month but are suspended for up to 18 months.
Barclays has an account for you, no matter what size company you run. They deal with limited companies, partnerships and sole traders and you'll probably find one close by with 1444 branches in the UK. Payment fees are £6 a month but under circumstances, start-ups can use fee-free banking.
Lloyds Community Banking
Lloyds provides limited corporations, associations, sole traders and charities corporate plans of up to 1 m annual turnover. The monthly charge for this account is £6.50, but this charge does not apply to new customers, who get up to 18 months of free banking.
Royal Bank of Scotland Group
RBS has just under 500 branches in the UK, and a worldwide network of national offices. We have bank accounts that support small enterprises, unions, sole traders, and charitable organizations. The fee is £6.50 a month, but new clients running small companies may be delayed for up to 2 years.
Banking and tariffs
It's important to read the small print carefully before you open your business bank account in the UK.
Monthly account management fees and fixed fees for banking transactions are difficult to find. Also, if those charges look low, they will build up over time.
Most corporations tend to make foreign money transfers from time to time, for example, paying out overseas-based suppliers. When transferring money or making direct transfers between accounts that use different currencies, it is worth paying careful attention to the fees applied.