How do you open a business account in the UK?

A business account can help you keep corporate and personal transactions separate, making it much easier to gauge profits, draft financial plans and submit accurate information to revenue services.  

If you’ve been wondering how to open a business account in the UK, read on. We’ll explain why business accounts are best practice, what to look for in a provider and what you need to submit to set up an account. 

What is a business bank account? 

In simple terms, business bank accounts – and accounts at alternative banking institutions like Interpolitan – offer a range of business-centric services and separate corporate and personal assets. 

Business accounts work in a similar way to personal accounts. You can view transactions online, make payments and receive funds from customers. Many business accounts also come with special reporting tools, which can make it easier to see how your company is doing.  

Why open a business account? 

Contrary to popular belief, limited company owners in the UK do not legally need to open a business account. They are, however, required to submit full and accurate financial records to HMRC (and, potentially, other revenue and licensing bodies).  

After each fiscal year ends, business owners must calculate total income and expenses, subtracting the latter from the former to reach a tax basis. Without a separate business account, it can be extremely difficult to untangle business and personal transactions. 

As a company owner, the burden of proof rests squarely on you. You must be able to prove that the expenses you claim genuinely relate to your business, for instance. Conversely, if you inherit £10,000 from a relative, you need to prove the funds have nothing to do with your business. 

If you own a limited company, your personal assets are protected if your business fails – and that’s another excellent reason to keep your business and personal assets separate via distinct bank accounts. 

Are there free business bank accounts in the UK? 

Because business transactions require extra scrutiny from a compliance perspective, virtually all traditional banks and alternative providers charge monthly fees. In return business owners benefit from secure accounts with proper regulatory oversight. 

How to open a business account in the UK 

To open a business account in the UK, you’ll need to gather information about your company and the people with “significant control” over it – for example directors and shareholders who own 25% or more of the enterprise. 

You'll also need to provide your official UK business address, Companies House registration number and identity documents for account signatories.  

Account opening procedures vary between providers, but in general, you’ll need to: 

• Fill out an application form online or in person. 

• Provide business-related documentation. 

• Verify your identity, your home address and your business address. 

• Go through a compliance screening process. 

• Make an initial deposit to open your account. 

  
  
  
  

Both traditional banks and alternative banking providers like Interpolitan must follow strict anti-money-laundering (AML) procedures to ensure the clients they onboard are law-abiding. Because of this, you'll have to go through a pre-onboarding compliance screening process.  

Be prepared to answer questions about the nature of your business, where incoming funds originate, who you plan to pay, which countries or regions you operate in and how you expect to use your account. 

Opening an account from abroad 

Opening a UK business bank account from abroad can be tricky. Many traditional banks have strict rules about which overseas businesses they can and can’t onboard. Minimum deposit requirements, residency stipulations and other requirements are tough to meet, and it can take a long time to open an account even if you qualify. 

Thankfully, alternative banking solutions can make life easier. In the UK, alternative banking providers must register with the Financial Conduct Authority (FCA) as electronic money institutions (EMIs) or payment service providers (PSPs) and are bound by a set of laws designed to keep consumer funds safe.  

To keep customer and corporate assets separate, alternative banking providers like Interpolitan place client funds in special segregated safeguarding accounts with tier one banking partners. They then issue clients with unique IBANs, so account holders can make and receive payments across regions quickly and easily. 

At Interpolitan, applicants go through compliance screening via video link rather than having to appear in person, making it easier for ambitious international business owners to open a UK business account for non-residents. 

Opening a business account with Interpolitan 

If you want to open a business account but would prefer to avoid the hassle of onboarding with a traditional bank, Interpolitan could be right for you. 

Opening an Interpolitan alternative bank account can help reduce your time to market in new regions, which is convenient for you and your customers. You’ll be able to transact in over 55 currencies across the world, track analytics, and much more. Best of all, because Interpolitan is regulated by the FCA, you can rest assured that every transaction is compliant. 

Interpolitan delivers flexible and comprehensive alternative banking solutions by blending cutting-edge technology with personalised service. Learn more about us or open an account today.