Do I Need a Business Bank Account? (UK 2026)
Whether a UK limited company or sole trader needs a business bank account, what banks ask for, and when to open one after forming your company.
If you run a limited company, you need a business bank account in practice: the company is a separate legal person, its money is not yours, and it must keep accounting records that show every payment. No law uses the words “business bank account”, but mixing company money with your own creates tax problems and breaks most personal-account terms. Sole traders are not legally required to have one, although a separate account makes record-keeping far easier.
Limited Companies: Why the Company Needs Its Own Account
When you form a limited company, you create a new legal person. It earns the income, owns the assets and owes the debts. Three consequences follow:
- Company money must stay separate. Money paid to the company belongs to the company. You can only take it out as salary through payroll, as dividends from profits, as a repaid loan or as a recorded director’s loan. See what a company director does.
- The company must keep accounting records. The Companies Act 2006 requires records that show and explain every transaction. A dedicated account does most of that work for you.
- Customers pay the company. Invoices are in the company’s name, so payments should go to an account in the company’s name.
Your accountant will need the company’s statements to prepare the annual accounts and Company Tax Return; see annual filing requirements.
Sole Traders: Optional, but Usually Worth It
A sole trader and their business are the same person, so the law does not require a separate account. Reasons to open one anyway:
- Personal-account terms at many banks do not allow business use.
- Your Self Assessment records are cleaner, and so is any HMRC enquiry.
- Customers see a business name rather than your personal name.
Weighing up a switch to a company? Compare the two in sole trader vs limited company.
Bank or Online Business Account?
UK companies can choose between traditional banks and online business account providers (often e-money institutions). Traditional banks offer lending, branches and protection of deposits under the Financial Services Compensation Scheme (FSCS) up to its limit. E-money providers usually open faster and online, but your money is safeguarded rather than covered by FSCS. Check which one a provider is before you apply.
What Will the Bank Ask For?
Every provider runs anti-money laundering checks on the company and the people behind it. Have these ready:
| What you need | Notes |
|---|---|
| Company registration number and exact registered name | From the certificate of incorporation or the Companies House register |
| Registered office and trading address | Some providers want a trading address that is not a PO Box |
| Details of every director | Name, date of birth, home address, nationality |
| Details of every person with significant control | Anyone with more than 25% of the shares or votes |
| Photo ID and proof of address | For each director and PSC; usually checked in an app |
| What the business does | A short description, the SIC code, who your customers and suppliers are |
| Expected money in and out | Monthly turnover, typical payment sizes, countries you will pay or be paid from |
| Online presence | A website or social profile helps, especially for new companies |
Applications are refused most often because details do not match: a name spelled differently from the passport, an address that differs from the register, or a business description that does not fit the SIC code. Check the register before you apply.
If You Live Outside the UK
UK high-street banks usually expect at least one UK-resident director or a UK address history. Companies run from abroad more often use online providers that accept non-resident directors. Which ones accept your country, and what they ask for, is covered in our separate guide to UK business bank accounts for non-residents.
A UK trading address can help with some providers. CorpAssist’s all-three address plan (£99.99 a year) includes a London business address for your website, invoices and account applications, alongside the registered office and director service address.
When to Open the Account
- Form the company and receive the certificate of incorporation.
- Apply for the account straight away, with the documents above.
- Pay for your shares into it, as agreed on formation.
- Put the account details on your invoices and send every sale and cost through it.
- Register for Corporation Tax, and for VAT and PAYE if you need them. The full list is in what to do after registering a company.
Get the Company Ready for the Bank
CorpAssist does not open bank accounts, but it gives you what providers ask for:
- Privacy formation for £199.99: certificate of incorporation, articles and share certificates, with a London registered office and business address
- International formation for £249.99 if you live abroad, with identity verification included
- Every application checked by a person, so names and addresses match your documents
- Official letters from Companies House and HMRC scanned and emailed to you
- Director identity verification through our Companies House-registered ACSP partner
Frequently Asked Questions
Is a business bank account a legal requirement for a limited company?
There is no law that names a “business bank account”, but a limited company is a separate legal person and its money is not yours. The company must keep proper accounting records, and its money must be kept apart from the directors’ personal money. In practice that means an account in the company’s name, and personal-account terms usually forbid business use.
Do sole traders need a business bank account?
No, not by law. A sole trader can use a personal account, although many banks’ personal-account terms do not allow business use, and a separate account makes your Self Assessment records much easier to keep.
Can I use my personal account for my limited company?
You should not. Company income paid into your personal account is still the company’s money, and taking it without recording it as salary, dividends or a director’s loan creates tax problems. It also makes your accounts harder and more expensive to prepare.
When should I open a business bank account?
As soon as the company is registered, before you invoice anyone. Shareholders can then pay for their shares into it, and every sale and cost goes through one place from day one.
Can I open a UK business bank account if I live abroad?
It is harder but possible. High-street banks usually want a UK-resident director, while several online providers accept companies run from abroad. Our separate guide to business bank accounts for non-residents lists the options and what they ask for.
Does CorpAssist open bank accounts?
No. CorpAssist forms companies, provides London addresses and arranges identity verification and filings. Banks and account providers make their own decisions; we give you the company documents and addresses they ask for.
Official guidance: taking money out of a limited company on GOV.UK.
Related guides
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