These are the 8 reasons you need a business account:
1. Makes it easier to pay tax and VAT
Separating your business transactions and finance from your personal finance will make it easier for you to pay your TAX and VAT. This is because you will have a more clear view of your transactions.
2. Keep your personal and business money separate
Keeping your business money and personal money separate is a good idea as you will not be spending your business money for personal use by error and vice versa. If you don’t do that, it will be very hard to distinguish your business finance from personal finance.
3. Be Able To Accept international payments
You will not be able to accept payments and trade internationally with your personal account. If your business requires you to make money transactions from abroad, then you need a business account.
4. Buying from wholesalers and suppliers
Wholesalers and suppliers will not give you a trading account from a personal bank account. You will need a business account.
5. Access to business finance and loans
You might not get access to business finance and loans without a business account.
6. Easier to pay salary for staff
It will be easier to pay staff salary from a business account.
7. Integration With Accounting Software
Some business accounts will enable you to integrate it with accounting software such as QuickBooks and Xero.
8. Professional image
A business account gives your company a more professional image.
Do You legally need a business bank account?
If you are a limited company you legally need a business account, but not if you are a sole trader. Here is further detail:
All limited companies legally need to have a business account. But, if you are a sole trader, then you do not have to have it. Although, it can be advantages to do so.
Limited Company / Limited Liability Company
A limited company and a limited liability company is legally required to have a business bank account. The business is a separate entity from you. You have to keep all its financial dealings separate from your personal bank account.
Sole Trader
A sole trader does is not legally required to have a business bank account. You can do the business dealings from your personal bank account. Even if you have a few people working for you, you can still use your personal account. But, you have to keep a record of your business transactions and finances for VAT and TAX purposes.
Partnership
If you are a partnership, you are not required to have a business bank account, legally, but it is practical to have it. It is better to separate your personal money from the business money.
A partnerships does not legally require a business bank account. However, it would be practical to separate the business money from personal money.
Business bank accounts
If you need a business bank account, here are some which you can open quickly and easily:
Additional information
If you would like more information about bank regulations, go to: Financial Conduct Authority (FCA).