The law
Sole traders are not generally legally required to have a business bank account.
Sole Trader Basics
Your Sole Trader Banking Setup
Three questions before you compare accounts.
The account
Check whether the account you intend to use permits business transactions.
The business
Think about how much separation and banking functionality your particular business needs.
Mixed personal
Business and personal transactions pass through one account.
Separate
Business money is kept operationally separate.
Business account
Specifically intended for business finances.
Mixed
Customer +£1,000 → one account
- customer
- materials
- mortgage
- software
Separated
Customer +£1,000 → business money
- business costs
- tax reserve
- money to you
Ask yourself
- □ How many business transactions will I have?
- □ Will I handle cash or cheques?
- □ Will customers pay directly into the account?
- □ How will I identify business transactions?
- □ Do I want accounting-software integration?
- □ Do I need business-specific banking facilities?