Best new business account?

[Stircrazyschoolmum]

Hello!

I’m looking to start a new service related business and want to set up a business account to coincide with the new tax year. I’m anticipating very low volumes to start with £500-1000 a month tops and no specialist functionality required, are there any tried and tested recommendations? Any helpful features I should be looking for?

Thank you

I recently (within the last 12 months) set up a Starling business account. I didn't actually have a lot of choice as several of the major banks weren't taking on new business accounts.

The Starling account was very easy to set up and the app is good. If you have to ring, they answer pretty quickly. There are various accounting options that you can pay for on a month basis but I don't know how good they are as I'm on the basic account at the moment. I think you can also integrate with various small business accounting software packages.

I second Starling. It's free, easy to use, and integrates well with other software

Thank you, I’ll look it up. I’ve also seen Mettle advertised.. I think it’s owned by NatWest.. which comes first, the business or the bank account?!?

I had to submit my Companies House docs I think. I also needed a letter from my accountant. Good luck!

I use CountingUp. They’re an online bank that offers free business account if your volume is small. They automatically track expenses and calculate your profit/loss. You can upload receipts for every expense. It tracks everything and makes doing the annual accounts and tax returns easy for you or your accountant- you can give your accountant read only access to your account and they can run reports to do your companies house filing and tax return filing.

@Stircrazyschoolmum

Thank you, I’ll look it up. I’ve also seen Mettle advertised.. I think it’s owned by NatWest.. which comes first, the business or the bank account?!?

The business. You need to register with companies house before you can get business account. It’s a good idea to get a business only email as well.

You don't need to register with Companies House to get a business bank account if you are operating as a sole trader. That is for limited companies only. You don't need an accountant either, I've never had one, and I do VAT returns and run payroll as well as all the usual stuff without any issues.
You do need a business bank account before you start taking money though. I have mine with Santander. Very easy to set up. I have the cashback account which covers a large proportion of the fee. The only bit of important advice I would give is don't go with HSBC. They are notorious for just closing business accounts with very little notice.

NatWest have been excellent for us. It was free I think for the first 18 months but even now the fees are minimal. The best thing is that they give you FreeAgent software to use alongside it completely free. It makes everything so simple, you can even time track through it which might be useful for you?

If you are a sole trader, you don't need to have a business bank account.

@NiceTwin

If you are a sole trader, you don't need to have a business bank account.

Your bank and/or accountant may disagree with that. There's no legal requirement, but personal accounts usually exclude business use and it makes accounting easier if it is all in one place.

I am with HSBC and regretting it big time! Very easy to set up (during lockdown) but their customer service is a nightmare.
I have also found out this morning that they are not prepared to speak out on the war against Ukraine and therefore appear to be supporting Russia! I am also looking to move to Starling ASAP!

Another vote for Starling. Mine was set up during lockdown when I started as a sole trader.

Just a point re incorporating as ltd company - unless there are other factors that would benefit you being limited, from a tax/accountancy cost point of iew, it's not beneficial until you hit profits of about £35/40k.

@DelilahBucket my accountant is fine with it.
HMRC also don't seem to have a problem making payments into it.

I have more than one personal account, so all business is done through one.
The bank know it's for business and they aren't concerned.

@NiceTwin

I have more than one personal account, so all business is done through one. The bank know it's for business and they aren't concerned.

If your bank know it's for business and "say" it's fine (I assume that has come from a customer service adviser in the branch) but your terms and conditions stipulate no business use then don't be overly surprised if you suddenly find yourself without an account at all because if the bank decide they don't like your usage they can and will shut ALL your accounts with them. I have been the person on the receiving end of angry customers who have had this happen to them. Of course, if there isn't anything in there about the account being for personal use then it's fine, hence my previous post. An accountant would have an issue if you were using one account for personal and business and they had to wade through all of your transactions. Other than creating extra work for them they don't care. I never said HMRC would have an issue. They don't care either.

Absolutely everything is above board with both the bank and account, who like me is straight as a die.
My business has been going 5 years so I can't see the bank doing a U turn. They are the only bank left in our town, which is why I went with them, rather than a faceless telephone/online bank.
My personal account is with a different bank, as is my husband's.