Why You Need a Separate Business Bank Account

Why You Need a Separate Business Bank Account

Even if you’re a sole trader and not a limited company you still need a separate business bank account. Here are some compelling reasons why.

  1. As soon as you get your personal finances mixed up with your business it will be difficult to keep an eye on how the business is actually doing.
  2. It’s hard to be disciplined about your business finances if you start to pay for personal stuff through this account. I suggest that you agree an amount you will take out of the business account each week or month and transfer it into your personal account.
  3. When your accountant comes to prepare your accounts it will take them more time to trawl through your business bank and sort out what’s for business and what’s for personal.
  4. If the tax authorities start an investigation into your business and it contains a lot of personal transactions they will want to see your personal bank account too. Can you remember why you deposited that money into your personal account a year or so ago? Those are the sorts of questions you will have to answer as they pore through your personal and business accounts.
  5. You will take your business more seriously when you have an account for your business.

If you’re worried about bank charges, don’t be! Most banks will give you at least a year of free banking when you start your business. Not only that, there are a few challenger banks out there where the banking is free like Starling and Revolut. Read the small print in case your particular circumstances don’t apply!!

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