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Opening a Limited Company Bank Account
If you go into business as a limited company contractor you need to open a small business bank account to deal with company transactions. If you’re a UK national with residence and banking history this should be pretty straightforward. However, if you’re a foreign national without a UK bank account you could find the process an uphill battle.Why open a Limited Company Bank Account?
When running a limited company you need to ensure that business funds are completely separated from personal finances. To do this you need a business bank account to deal with all company transactions.You will need an account to:
- Receive contract income from Clients and Agents
- Pay taxes to the HM Revenue and Customs (Including; VAT, PAYE deductions, Corporation Tax)
- Pay employees and shareholders dividends, salaries and expenses
- Make company purchases (Including; Computers, Business Telecoms Equipment, Office Space and Equipment, Travel Expenses etc)
Online Business Banking & Telephone Business Banking
Whichever bank you decide to use make sure that they have a good Online Business Banking System. Online Business Banking can save you a lot of time and reduce business administration. Instead of writing a cheque, make an online business transfer. Instead of waiting for a monthly statement or going to a cash point to gain a statement, simply log on and view up to date transactions.The ability to log onto you bank account and view up to the minute information is important when dealing with Client/Agent payment disputes. You can confirm exact details of payments on-screen immediately rather than calling up telephone business banking or going into the branch.
Banking with your Personal Bank Account Provider
Consider opening a business account with your personal bank account provider. There are a number of benefits to this:- Payments from you business bank account to your personal bank account are normally instant as most UK high street banks update accounts in real time. If you had for example a business bank account with RBS and a personal account with HSBC the transfer would take 3 working days (unless you made a CHAPS transfer which would cost around £20-30)
- As you already have a history with the bank there will be less red tape when opening an account. This means you could be in and out in 10 minutes rather than an hour
- You only have to update details once rather than twice. If you move house you need update address details with the bank. Using the same bank saves you time
- You already know the banking processes used
Documents required when opening a Small Business Bank Account
When you open a limited company bank account you need to go to a meeting with a bank representative and take documents to prove the company exists and that you are who you say you are. Original documents must be taken to the meeting, photocopies are not acceptable. The documents you’re required to take depend upon whether you are a UK national with a banking history or not. Non UK nationals new to the UK find it more difficult to open an account. Some banks (such as HSBC) operate globally and may be able to open a UK bank account for you before arrival.Documents required normally include:
- Limited Company Certificate of Incorporation
- Last 3 months UK Personal Bank Statements
- Passport
- Driving Licence
If you are a non UK National you should also take the following documents:
- National Identity Card (if appropriate)
- Tenancy Agreement from the home you are renting in the UK
- Proof of Address in your home country (Recent Bank Statements, Utility Bills etc)
- A Letter form your previous bank (To confirm you banking history and personal info)
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