A comprehensive guide to knowing how to open a business bank account in the UK, this article will take you through the processes needed for you to smoothly get started with your UK business!
A business bank account allows you to separate your business from personal finances – which is especially important for properly managing and keeping track of all business transactions. Regardless of whether you are a sole proprietor or have a business with employees, having a business bank account simplifies many financial transactions and streamlines your financial activities, giving you more time to focus on growing your business.
What documents do you need to open a business bank account?
To open a business bank account in the UK, the following are the required information to be prepared:
- Full names and date of birth of all company directors
- Proof of identity (ID), this can be your passport, driving license or national ID
*all company directors are required to show proof also - Proof of personal address
*if you are residing in your current one for less than 3 years, proof of your previous housing needs to be shown - Full business address
- Contact details for the business
- Companies house registration number (for limited companies and partnerships)
- Estimated annual turnover
Can anyone open a business bank account?
Of course, the straightforward answer is yes, as long as you do own a business. But there are other factors that should be considered before you are eligible and ready to open your first business bank account in the UK.
Although a business bank account is required and necessary for limited companies, sole proprietors should also look into opening a business bank account, as mentioned earlier.
But, before officially opening a business bank account, here is a suggested checklist to consider in order to make sure you are ready to open your business bank account.
1. Check your Credit History
Personal credit history might be an indicator to banks about your financial situation and influence the potentiality of being able to open a business bank account. However, it is more often than not that people have a personal poor credit history.
Besides that, banks will still allow people with poor personal credit history to open a business bank account, so as long as your business has a feasible plan. Therefore, a nifty tip is to check your credit history prior to opening your business bank account to check for any outstanding amounts that might peg you down.
2. Is your business plan feasible and credible?
Proposing a thoroughly thought out business plan with details on financial and logically projected forecasts on profits and losses will greatly impress the bank and therefore, place you in an ideal position to open a business bank account.
This point goes hand in hand with the question of credit history, as long as you have a solid and feasible business plan, the chances of opening a business bank account is more likely despite possible bad credit history.
3. Are you on the Electronic Register and registered with HMRC (HM Revenue & Customs)
Being a registered member on the Electronic Register and being on the HMRC is important as it makes the application process much smoother.
Can you open a business bank account online?
With the advent of Covid-19, smart technologies have revolutionised many processes. This includes the application process to open a business bank account. Nowadays, most of the UK’s banks allow you to open a business bank account online, having customised interfaces that make the experience smoother and interactive.
An example is Barclays, a bank that allows you to apply with an online application form. It automatically lets you know what information is missing before you can successfully open your business bank account.
Many banks in the UK allow you to apply for a business bank account online, like HSBC and Starling Bank, with 24/7 app on-the-go services to complement your experience of online bank activities. These banks are also increasingly adopting regtech solutions in the banking sector to streamline compliance processes and enhance customer onboarding experiences.
Top UK banks for business bank accounts
Barclays
- Simple and easy to understand online, digital interface
- 2 simple price plans with an online calculator for you to make a better informed choice
- Free business banking for the first 12 months upon opening your business bank account
- 24/7 fully digitalised services and app to allow you to manage your business’ finances on the go
HSBC
- Free business banking for the first 18 months upon opening your business bank account
- Fixed fee payable for the subsequent 12 months
- Free Visa Business debit card will be issued
- 24/7 fully digitalised services and app to allow you to manage your business’ finances on the go
- Available overdraft services
Starling Bank
- Zero monthly fees payable
- 24/7 fully digitalised services and app to allow you to manage your business’ finances on the go
- Integrated online banking services, the app is also equipped with accounting services
- Open banking marketplace that connects you to 3rd party applications
To Sum Up
In summary, opening a business bank account is a step in the right direction in managing your business properly and systematically. Knowing the full process in order to open your business bank account frees up more of your time. Now you can focus on the other business functions to help boost the profits.
