Business Bank Accounts

(3 minutes to read)

Once you have formed your limited company, the next step is to setup a business bank account, so you can be paid for the work you carry out.

Can’t I just use my Personal Account?

If you are setting up your own limited company, it is a legal requirement to have a business bank account. This is because the limited company is a separate legal entity from its directors and shareholders. All financial transactions relating to the company need to be traceable at every stage, so it is not permissible to use your personal bank account to run your company. Even if you are operating as a sole trader, using a business bank account will make it much easier to keep track of your professional finances.

What are the differences between a Business and Personal Account?

  • Opening a business bank account will require more stringent checks than a personal account. You will need to provide your company’s certificate of incorporation and other documents, as well as your ID.
  • A business bank account will usually charge a fee, typically £5 or more per month, or an annual fee. Many banks offer an introductory period with no fees. Some accounts are available with no fees, but typically your turnover will need to stay below a certain threshold to qualify.
  • In addition to flat fees, there are additional costs involved. These can apply to anything from debit card use and withdrawing cash, to transferring money and issuing cheques. This varies from bank to bank, so check the small print carefully – see below for a list of likely transactions.
  • A business bank may allow you to borrow money as a business, get a business credit card and take card payments from customers.
  • It will take longer to open a Business account – usually one to four weeks.

What will I use a Business Bank Account for?

Your business bank account will handle all transactions through your business. The most common are:

  • Receiving invoice payments for your contract work – generally by BACS transfer.
  • Paying income – both your salaried income through payroll and dividends.
  • Paying taxes – PAYE, Corporation Tax and VAT.
  • Paying for business expenses – travel, accommodation, administrative costs, etc.
  • Direct Debits – such as utility bills, mobile phone and professional subscriptions.

Do you want £95+VAT per month accountancy?

Yes I do

Which Business Bank Account should I choose?

Every major bank offers business banking, so you have a wealth of options to choose from. The best will depend on your own personal circumstances and the activity through your company, so discuss your expectations with your accountant and read the small print. Some firms will partner with business banks who offer discounted packages tailored to meet their clients’ needs – it’s always worth checking to see what is available.

A few things to check are:

  • Charges and fees. Don’t just look at the introductory rate or monthly fee – check and compare charges for transaction types you expect to use through your company.
  • Interest. Some business accounts pay interest on balances – others don’t. Be careful that interest on balances isn’t offset against higher fees!
  • Online and telephone banking. Accessibility is important, particularly when reconciling business expenses and expenditure. Real-time statements are particularly useful.

Dealing with a large number of contractors, a specialist contractor accountant is often in a unique position to give feedback and recommendations on the best banks. Dolan Accountancy has partnered with Tide to provide a unique offer to contractors setting up a Business Current Account. For more information click here and for more general advice on business banking, please call us on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, ContractorUmbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of ContractorUmbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, ContractorUmbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use CashPlus free of charge for the first year, saving you £69.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

Dolan Accountancy

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