If you are operating a business in the UK, it is imperative to open an account for it. However, before you do this, you should consider choosing the appropriate banking services as this is a vital opportunity to get your business‘s ground rolling. It is inconvenient for you to maintain separate accounts for business and personal services. However, it is important to do so that your accounts can be clean. At the end of this piece, you will learn how to open one, options available, and cost for opening a business account in the UK.
What You Need to Open a business account in the UK
If you are setting up a business account in the UK, the process is easy and straightforward. You only need to comply with the set eligibility criteria. There are some documents that you will have to produce for the process to flow seamlessly. These include the following;
ID. As a company director, this is a prerequisite. Your proof of ID would be your national Identity Card or a passport, or you could use your photo driving license.
Proof of Address. This includes your utility bill or a bank statement that is a recent one. You also could use a council tax statement.
Along with these documents, you will also have to give the following details of your business.
- Business address and this includes its postal code
- Its contact details
- Give the Companies House registration if this is a limited company or partnerships
- Approximate annual turnover
- In some instances, one would be required to give their personal financial situation, providing documents to prove that you have outstanding credit and bank history
What to expect from a good business account in the UK
Financial institutions are also in the business of attracting new clients, and for that reason, they will give you perks to lure you into choosing them. To know whether the bank account you are choosing is the most appropriate for your business, here are some of the things you will expect them to provide.
A personal advisor
They will accord you a personal specialist that you can be infrequent and direct contact. The specialist understands the ropes of your business, meaning that they have a more personal experience when discussing and addressing your banking needs.
Most business accounts in the UK charge a monthly fee. They may also ask an additional fee for some transactions like depositing cheques. Roughly, you will pay £5 per month for the business account maintenance. £10 per month would be on the higher side. Therefore, there is a need to shop around to choose the bank that will offer value for your money.
Most banks in the UK today have an app which enables their clients to have real-time access to their funds. This helps the client not to make a rush or uninformed choice when dealing with their finances. A banking app is essential, especially if your business bank account you choose can sync online accounting software.
A free introductory period
A good bank in the UK offers a fee-free introductory period which means that during this period, your business account does not incur any operational cost. While it is important to check whether the bank allows this, and for what period, you also should be sure of how much money you will incur when the fee-free introductory period is over. It is time-consuming to change bank accounts, and therefore, you do not have to rely on the initial offer to an expense of incurring vast amounts of money afterwards.
Running any business consumes a lot of time. Sometimes, you will seldom have time to go to the bank every other day to personally speak to an official. Therefore, a business bank account that can be operated with a telephone is a way better option.
Find a bank that can lend you money through an overdraft. Research how much the bank is willing to lend your business, the interest charged and the asking fee.
Does your business deal with overseas clients? If yes, you need a business bank account that can process international transactions.
How Much is it to Open a Business Bank Account in the UK?
Most business accounts in the US levy a monthly or annual fee. But this amount is only for a set period e.g. one or two years. However, some banks do not charge when opening one. You also can try Neobanks. These are those financial service providers that are ideal for information-hungry clients that are good at using technology. These banks expand their services to the underbanked as well as offering low transaction cost. Most Businesses take advantage of Neobanks since they are easy to open, they ask for fewer information and their charges are cost-effective.