Do You Legally Need A Business Bank Account?
You’ve taken the plunge and started your very own business. Congratulations! But can you use a personal account for business? Or do you legally need a business bank account?
What is a business bank account?
A business bank account is a bank account specifically designed for businesses, it helps manage business finances and keeps the business funds separate from the owner’s personal funds. Features vary between accounts, but most business bank accounts offer competitive interest rates and mobile banking features so you can access your financial information at any time from a smartphone or mobile device.
While it’s true that personal accounts are convenient, they don’t offer the same benefits as business bank accounts. If you’re going to be running a business and making business transactions, it’s important to keep your finances in order.
At Joanna Bookkeeping, we understand that keeping track of the financial details of your business is never easy – but it doesn’t have to be difficult! Our team of Oxford-based accountants can take care of everything from tax and VAT to helping you choose the best accounting software. Let’s have a chat!
Do you legally need a business bank account if you’re self-Employed?
If you’re a sole trader, the short answer is no, legally you don’t need a business bank account and technically you can use a personal account for business. But it’s having a separate bank account for your business has many advantages, such as:
- Avoids confusion between personal and business transactions
- Makes bookkeeping quicker, and more efficient
- Makes preparing tax returns quicker
- Saves on the cost of an accountant or bookkeeper as they will be quicker at their job
- Overall better finance management
Do you need a business bank account for a limited company?
It is a legal requirement that a limited company has its own business bank account. This is because the company is its own legal entity with its own obligations and finances. The profits of a limited company legally belong to the company and are paid as dividends to shareholders.
Setting up a business bank account for a limited company is a legal requirement, but it also makes managing your business finances a much simpler process. By separating your personal and limited company finances, you can be sure that all of your company’s income is appropriately recorded, which gives your clients and potential investors a more professional impression of your company and helps build trust in its long-term sustainability. It shows professional acumen and can improve your cash flow.
Business bank accounts can be relatively easy to set up and maintain. Opening one on the internet can be quick, but it’s important that you make sure you find the right business bank account for your needs. That’s why it’s beneficial to do proper research and sometimes maybe even get some advice from a professional.
Joanna Bookkeeping is a team of passionate Oxford-based bookkeepers and accountants, and if you’re not based in Oxford, no worries, we’re fully digital and offer our accounting and bookkeeping services to businesses all over the UK!
Your Accountant in Oxford
Oxford Office
Joanna Bookkeeping
The Wheelhouse Angel Court
First Floor, Angel Court
81 St Clements St
Oxford
OX4 1AW
Connect
joanna@joannabookkeeping.co.uk
01865 591952
