How To Come Up With A Business Idea - Part 6
How To Come Up With A Business Idea.
Part 6 of 6
How to get business banking for your UK limited company - and do you even need one?
Any type of business will involve money (well hopefully that's the case) - but money needs to be kept in a bank at some point.
There is no legal requirement to have a business bank account if you are a sole trader or partnership. It is only necessary for a limited company.
However, it is quite useful to keep your personal and trading accounts separate especially for completing your tax returns and claiming expenses that can be offset against the profits made to reduce your tax bill.
At the same time, you are likely to come under pressure from your bank. It will be unwilling to provide free banking services for business transactions.
Fortunately, several banks offer "free" business accounts for periods of six to 12 months. So if your present bank starts to impose charges on your second account threaten them with a transfer to another bank offering a free period. That should do the trick.
It’s likely that somewhere in the small print of your personal bank account documents it says that your account should be for personal use only.
If your bank realises that you’re using the account for your business - particularly if there’s a lot of money passing through or you’re handling a lot of cash and cheques - they may threaten to close your account and tell you to open a business account.
Like a personal bank account, a business bank account can offer cash and cheque handling, a debit card, and an overdraft facility.
As with your personal account, you’ll be able to set up direct debits and standing orders. Having a business account also paves the way for your business to borrow money, get a business debit card, and take card payments from customers.
Also, you might need to use a business debit card to make purchases to keep the cash flow running. A personal bank account will not approve you for such transactions.
- Officially form your UK limited company, cheaper than through companies house!
(We'll pay the £12 incorporation fees) No need to pay monthly rent for an office address, use our central London ones instead and look like a multi-million pound company from day 1!
(We'll also forward your important government letters to your address for free!)
- Free accountancy consultation by a qualified accountant so you can save money on taxes and avoid fines.
- Free 1-Year business web hosting with a choice of a free .co.uk or .com domain name.
- FREE 1-Year Business Bank Account with Barclays, plus up to £100 cash-back! - that should make you profitable from day 1!
Having a dedicated bank account can make your business appear more professional, as clients can make payments to an account held in your business name rather than your own name.
Some clients don’t like making payments into non-business accounts. At the end of this lesson, we'll show you exactly how to get 1-year free business banking with up to £100 cashback!*
Many banks offer cash back to customers who sign up through their approved partners. It's a way to incentivise their partners to get more people to signup with them.
This cashback comes in handy when starting a new business and ensures you start your business already in profit from the get-go. It can cover the basic things like company formation costs, domain name and hosting costs.
There are many such partners out there that are approved to refer you such as accountants, advisors etc - (people who are in contact with potential new business owners)
At RegisteredAddress - we also offer some extra bonus and offer up to £100 cashback* for anyone that registers through us!
- New customers who purchase a Registered Office Address service with us will get up to £100 cash-back* from us for opening a business bank account.
- All other applications from customers and non-customers will get £50 cash-back for opening a bank account.
Keep things clear for HMRC
When you complete your tax return, you need to tell HMRC how much money your business has made.
You can subtract certain allowable expenses (travel costs and office costs, for example) to calculate your taxable profit.
If your personal costs are mixed up with your business costs because you use one bank account for both, it can be difficult to make these calculations accurately.
Having a dedicated business bank account makes it much simpler to complete your tax return.
Starting a new business can cost money, from buying a domain name to getting an office, paying monthly bank fees and even paying to form the limited company itself!
Typically, this is only a problem in the first year of business, and after 1 year, a business is sufficiently profitable that these fees aren't usually a problem.
*Offer expires 6th Feb 2019
50% Off Directors Address service
If you also buy the Registered Office Address and Business Address services.
FREE Company Formation (Was £20)
With every Registered Address service. Submit in as little as 60 seconds!
£25 Off Dormant Company Accounts
Let our accountancy team file this with Companies House within 24 hours!