This can cut down the costs of transacting internationally considerably. There’s no penalty for switching bank accounts regularly, and doing so can help ensure you are getting the best deal. According to data from Statista, 80% of small businesses use online banking, but which option works for you depends on your business needs and your own personal preferences. Depending on which provider you choose, you may also be charged for depositing cash.
Why it’s the best sole trader bank account
However, since Revolut received its UK banking licence in July 2024, FCSC protection will be in the pipeline. International payments are also charged on a pay-as-you-go basis, costing £5 each. Note that the rollout of MTD also means that the annual self-assessment process will come to an end. Instead, you will need to submit your self-assessment tax return on a quarterly schedule.
- When registering as a sole trader, you typically have to provide your name, address, date of birth, phone number, NI number, business name, business type and start date.
- If there are high monthly maintenance fees, simply owning the account could reduce your profit margin and might not be worth the investment.
- Business costs are anything you have spent money on to help you earn your income, such as office supplies or travel costs.
- But there are a few reasons why a specific business bank account could be a better option.
Tide — Established British sole trader bank accounts
- PNC has a basic checking account for businesses which has several easy ways to waiver monthly fees, including a low deposit requirement of 500 USD.
- One of the most overlooked benefits of maintaining a separate business bank account is the legal protection it provides.
- According to government statistics, there are around 4.1 million sole traders operating in the UK.
- Your business transactions are in one dedicated place, which makes it much easier to categorise expenses and track cash flow.
- 💡 Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks.
- How you open your business account will depend on the provider or bank you pick.
Becoming a sole trader is probably the easiest and fastest way forward if you’re exploring a new business idea, but there are some requirements and regulations that must be followed. There’s no monthly charge on the account and it comes with an overdraft. To boost your business’ functionality, you can opt for the Business Toolkit for £7 a month. Its business offering comes with automated bookkeeping, accounts for sole traders business insights, professional invoices and automated receipt scanning as key features along with tax calculated and filed for you. Metro Bank has a simple Business Bank Account open to sole traders with under £2m turnover. Free trials are essential to take advantage of when choosing your accounting software, as they give your platform a test run without making an actual commitment.
How to choose the best sole trader account?
As a sole trader, you need net sales to keep business accounts just like any type of business. The Co-operative Bank offers the Business Current Account, which is ideal for sole traders who don’t often bank with cash or cheques. HSBC has two options for sole traders and single directors of limited companies.
Revolut Business Basic
The exact costs will depend on the account, but you might have to pay a monthly account fee, or there might be fees for certain banking transactions such bookkeeping and payroll services as money transfers. Airwallex offers business account services to UK customers as well as serving many other countries and regions. Airwallex accounts can be used to pay and get paid in multiple currencies and are handy for anyone taking online payments as they offer different options to be paid through links and plugins.
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