How to Open a Business Bank Account in the UK?
Even though you can use your personal bank account for business transactions, especially if you’re a sole trader, keeping your personal and business finances separate is good. Some banks might allow you to operate your personal account as your business account. Still, you need verification of your business details by the banks to be eligible for Bounce Back Loan.
You should prove your ID and address as you’re opening a personal account, but, of course, there are additional details and documents you need to provide about your business. Small nuances depend on your business structure, but most of the process for opening business accounts for different structures is similar.
What Do You Need to Open A Business Bank Account for Startups in the UK?
As always, you should ask your bank if it needs extra documentation, but the standard procedure requires four simple steps: providing proof of your ID & address, basic information about your business, financial information about your business, and some personal information. You need to gather one or more documents for each step.
You can open a sole-trader and limited business account if your business is new, has less than £6.5 million turnover, has a forthright and clear business structure, and is based in the UK.
Verifying Your ID & Address
One of the following documents is usually enough to get your ID verified by your chosen bank.
- Your passport
- Your national ID card
- Your driving licence
To prove your address, you need one of the following documents.
- Your driving licence
- Bank or credit statement from your bank that is less than three months old and issued in-branch
- UK mortgage statement that is less than 12 months old and not printed from the internet
- Council Tax bill that is less than 12 months old
- A letter or a payslip from your employer in the UK
Your bank may require extra documentation to verify your ID and address if you’re not a citizen of the UK, EU, or EEA country. Also, you can’t usually use the same document, such as a driving licence or passport, to prove your ID and address simultaneously.
Above mentioned documents are enough if you’re a sole-trader. If you have a limited company, you will need to add
- Certificate of incorporation
- Companies house registration documents
- Registration forms for your directors, members, or the company secretary if you assigned any
If you’re in a partnership, you will need to add
- Partnership agreement
- Contract of co-partners
- Certificate of formation
- Evidence of the partnership trading address
Basic Information About Your Business
Sometimes banks can get information about your business themselves, but you can save time if you give the following information to your bank.
- Business Name: You should provide the legal name of your business when you first started trading. You should inform previous names to your bank if you changed your business name in the past.
- Other Names You Registered For Your Business: If you registered other business names or trade marks, you should give your bank other names you operate under. For example, you could be running your business as Startups of London, but it may be registered as Startups of London Ltd to the Companies House.
- Company Registration Number: You can find your company registration number in the documents that Companies House provided.
- Date Of Incorporation/Formation: You will inform your bank about the date of incorporation of your company if you have a limited company (incorporation) or if you’re in a partnership (formation).
- Country Of Incorporation/Formation: You should provide information on your company’s country of incorporation/formation if it’s not formerly registered in the UK. This applies only if you have a limited company (incorporation) or if you’re in a partnership (formation).
- The Date You Started, Or Will Start Trading: Your bank will want to know this to determine your banking activity.
- Business Address: This could be your home address if you’re self-employed both as a sole-trader or in your limited company, as well as your rented or owned office space.
- Business Correspondence Address: This can be the same as the business address. You could choose to give your home address for your bank to send correspondences directly to you.
- Registered Address: This is the address you registered to Companies House if you have a limited company.
- Contact Details: This includes your personal and business email addresses, phone numbers, and other ways for your bank to communicate with you.
- Previous Banking Details: This might not be mandatory in all cases, but showing other capital sources could build trust.
Financial Details About Your Business
Some of the requirements of financial details about your business might include information that is not available yet, such as your employee numbers if you’re a sole-trader or breakdown of businesses you trade with that are outside of the UK. We recommend you consult your accountant or your bank if you can’t give information about the following items.
- Main Business Activity: You should describe the products and services you provide to explain what the business account will be used for. This might be simple for some activities, but the nature of some services are more complicated than others. So, you have to be sure that your bank understands what you’re doing clearly. Also, you might have to prove that you have the required licence for some activities.
- Number Of Employees: You can employ people even if you’re self-employed, but you need to notify HMRC that you’re doing so, as well as your bank.
- If You Are Trading With Businesses Outside Of The UK,
- you need a breakdown of the countries they’re based in and
- their approximate share of your turnover or amounts per customer
- Business Investment: You should show the source of your funds if you invested or plan to invest any money in your business.
- Estimated Turnover: Your expected turnover should be realistic and well calculated. You can scale your estimation based on your previous year’s turnover if you’re already trading for a year or more.
- Expected Amount Of Money You Will Pay Into Your Account: Your bank needs this information to compare your expected activity and actual activity on your account to monitor if there’s any unusual activity.
- Tax Status: Your bank might need to inform authorities about your tax status, depending on the information you provided and your business type.
- Expected Ratios Of Your Income Sources: You need to give estimated percentages of the sources of your income, such as sales of products, services, subscription fees, donations, copyright, and intellectual property rights.
Personal Information
The bank will need your personal information to verify your ID and authorise you to operate your account if you need to use mobile banking. You need to provide your
- preferred title
- legal name (including previous ones)
- birthdate
- place of birth
- nationality (including dual nationalities)
- citizenship
- country of residence
- current home address
- moving date to your current address
- the account’s other authorised users’ information, such as their
- name
- home address
- birthdate
- and nationality (including dual nationalities)
You should have an appointment in a branch of your bank after you gather all your documents. If you want to open an online business bank account in the UK, most major banks don’t accept online applications via their website, but there are some exceptions. We also recommend you do a little research to apply other products or services that might become handy for your business, such as chequebooks, credit and debit cards, online and mobile banking.
You can also open business accounts in digital banks. FinTech companies like Tide.co, Revolut, TransferWise, and Starling Bank also offer the same services as physical banks.
