What are the benefits of opening a business bank account?

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Hi, my name is Sam and I have just set up a limited company in England and Wales. I will be working as a consultant in the PR sector, and most (if not all) of the company’s work will be done by myself. I’m weighing finance options, and am wondering what the benefits of getting a business bank account would be. Could one of you guys please give me a break down?

Answers

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Hi Sam,

Congratulations on setting up your new limited company.

Whilst you can simply use your personal current account to pay for expenses and accept payments through your company, there are lots of benefits to opening a business bank account for these purposes:

  • Easier to keep track of your cashflow.
  • Transactions are easier to trace.
  • Business income and expenditure is kept separate from personal transactions
  • Easier to keep your accounts accurate and up-to-date
  • Tax returns and payments are easier to work out
  • If you hire an accountant, it will make their life easier and keep your costs down
  • Less risk of paying yourself illegal dividends
  • Simplifies matters if carry out an audited or get spot-checked by HMRC
  • Most bank accounts provide specialist help and advice for new business owners

It’s entirely up to you but I would recommend setting up a bank account in your company name when you start trading. Take a look at some comparison sites to find out what offers are available.

a year ago
 

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