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Do I need a separate bank account?

Sole Trader - do I need a separate bank account?

It is not essential that you have your business bank separate from your personal bank, but it is advisable and in the long term will make your life so much simpler

 It is not a legal requirement to keep your business money separate from your personal money, but it is advisable and  will make your life so much simpler, with much less admin work.

Reasons to keep separate bank accounts

  • Keep business and personal transactions separate and have a clear picture of how your business is really doing.

  • You have a clear understanding of your business cashflow.

  • If kept separate you can use your bank statement to highlight and record of all your business transactions.

  • Your yearend self-assessment is quicker and easier when records are clear.

  • You can pay yourself a “wage” by way of a bank transfer from the business account to your personal bank account.  These are called drawings.

  • It looks professional to your customers. Builds credibility for your business

  • Bank transfers are cheaper than taking card payments

  • It can build your business credit score, handy if you need to take out a business loan in the future.

  • Bank integration to cloud software makes it easier to reconcile your business transactions for your bookkeeping. Never miss anything.

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