If you are looking for business opportunities in the UK, setting up the right kind of bank account and looking for the best banking service is the first thing that comes to mind. As overwhelming as it may seem, you want to get the fundamentals right for your business.
Gathered here is all you need to know about opening a business account in the UK. Possible options, best banks and the pros of having a business account; whether you are a one-man-band, a freelancer or a newly-established business, we've tried to cover every kind.
There are a number of reasons why one might need a business account.
A dedicated business account makes you appear more legitimate and professional in the eyes of partners and clients.
It's a wise practice to keep personal and business accounts separate; they are easy to organize and minimizes the risk of a personal account being deactivated or banned by the banking authorities if the bank statement shows a suspiciously large number of business-related transactions.
If your personal and business account is one, the HRMC might demand an explanation from you upon investigation about your source of income, your turnover and the tax returns.
It's important to familiarize yourself with the process of opening a business account and finding the right service that fits your needs, otherwise, it could be quite a hassle.
If your business is based overseas, your local bank could possibly set up a business account for you if they are in alliance with a British bank.
Most major banks in the UK offer international accounts. If you do not have enough documents to prove that you are a resident of the UK, they could be a great option for your business.
Most banks even have the online banking service so you can apply online. Banking Leaders like Barclays, Lloyd's, HSBC and NatWest all offer international bank accounts.
However, due to limitations like account-opening deposit, maintaining minimum/average account balance and monthly service charges, opening an account in the UK from overseas may not be in your best interest. Moreover, there may be other restrictions like the inability to change services or close the account until a certain time-period comes to an end.
Luckily, a lot of virtual money transfer services like TransferWise, Western Union, Payoneer and PayPal have made banking and lives easier.
TranferWise is our best bet among all. TranferWise allows you to set up a business account within minutes with their easy and safe verification process. the activation is free of charge. The virtual account can hold around 40 currencies at once. You could convert at retail rates, with a transfer fee (depending on the transfer type which you can choose from a drop-down list) and transfer money worldwide; all under one centralized platform. Although some countries don't offer the service yet, you can request a debit card as well, which gives you even more freedom.
Make international payments up to eight times cheaper than high street banks
Convert your money at the mid-market exchange rate
Holdover 40 different currencies in one account and convert between them quickly and easily
Get unique international account details for the UK, EU, AUS, and US (so you can invoice customers in those geographies like a local and get paid in these currencies for free)
No subscription or monthly fees. The only fees you’ll pay is a small, transparent fee on the value of the transfer
FCA regulated
Open an account quickly with typical verification times around 2 – 5 working days
In order for businesses to set up a bank account in the UK, the process is relatively simple as long as you meet the eligibility criteria.
Ensure you have all the following necessary documents ready to submit upon opening your account:
A hard copy/ Scanned copy of passport, national ID card or photo driving license should suffice.
A utility bill, rental property/ own property contract or recent bank statement. A council tax statement also works.
You will be mandated to provide the following details of your company:
Full business address (including postcode)
Contact details
Companies House registration number (for limited companies and partnerships)
Estimated annual turnover
In some cases, you may be asked to prove your personal financial stability, with enough documents to corroborate that you have a clean credit and banking history.
The process of setting up a business account in the UK may vary from bank to bank and also on your business's goodwill/ net worth. It's suggested that you search online for possible options, before anything else. Most banks would require you/ a business representative to visit the bank and meet them in person before they can grant you access to business accounting privileges. You will be mandated to submit the above-mentioned documents with valid photographic identification for all partners/shareholders. the physical presence of one of the stakeholders would be required in the UK to sign all necessary papers/ mandate so the business account could be set up without a hitch.
You should mention if you have foreign shareholders/ business directors, thus you need a business bank account rather an international bank account. You are free to use your local bank account for your business needs.
1,500 branches in the UK
Free and contactless Visa debit card as standard
Business account free for the first year and comes with a choice of financing options
Offers a start-up business account with free business banking for the first 12 months, and an established business account with two simple price plans
1,100 branches around England and Wales
Active in 80 countries
If you bank with HSBC in your home country, they can help you set up an account in the UK before you get here
Range of business bank accounts available
Businesses with a turnover up to £2 million receive an annual review to ensure the best standard tariff for their business
Around 1,300 branches in the UK
18 months’ free day-to-day business banking
Three business accounts with a range of tools, including reduced-price legal assistance, and accounting software
1,400 NatWest branches across the UK
NatWest’s Select current account is free to use and comes with a contactless visa debit card as standard
Four business accounts to choose from, depending on the size of your business.
Business account fees Free business account period
Barclays £6/month 12 months
HSBC £5.50/month 18 months
Lloyd's £6.50/month 18 months
TransferWise £0 N/A
The application processing time may take anywhere from 2 weeks to 3 months. It involves meetings and verification of documents, so make sure this time is considered in your business planning process.
There is a rampant number of foreigners opening/ registering companies in the UK, which is why they may also need a corresponding UK bank account.
Non-UK residents not having the necessary ID documents can still open an account, as in recent years banks have shown greater flexibility.
It is not necessary to be a resident in the UK in order for you to open a UK business bank account, although it’s advisable to acquire UK residence permit before applying for one.
To open a UK business bank account, banks generally require two documents: