There are several reasons to switch bank accounts. These could centre around cost, customer service or new features at a rival bank. Here are a few things to think about:
There is no official business banking switch scheme. Instead, as long as you’re a small business with an annual turnover that does not exceed £6.5 million and you employ fewer than 50 people, you can use the Current Account Switch Service (CASS).
This means that your new business bank will switch your payments and transfer your balance, and your old bank will close your old account as long as you’re switching between banks and building societies that participate in the scheme.
Don’t get confused with the old RBS Business Banking Switch Scheme. This programme was one of the conditions for the government bailout of the RBS Group, which encouraged RBS business customers to switch to a number of challenger banks. It offered incentives such as “dowries” and financial contributions towards professional fees. But this scheme ended on 28 February 2021.
If you’re using the Current Account Switch Service, it’s very easy to switch business accounts. First, make sure you’re eligible to switch. Your business must have fewer than 50 employees and an annual turnover below £6.5 million. Then follow these steps.
As part of the Current Account Switch Guarantee, all your payments will be moved across, and any payments accidentally made to your old account will be automatically redirected to your new account.
To make use of the Current Account Switch Scheme, both your old and new bank need to be part of it.
There are over 40 participating banks and building societies in the UK. You can find the full list on the Current Account Switch Service website.
Opening a business bank account for your company makes a lot of sense. For a start, some banks simply won't let you use a personal bank account for business transactions. What's more, opening a business bank account will make you look more professional and trustworthy to your clients, who might be happier making payments into a business account rather than a personal one. Keeping your business transactions separate from personal payments will also make your life a lot easier when it comes to filing your tax returns, plus you can often sync accounting software with your business bank account. Additional benefits include that it can enable you to build a business credit score and you might be able to take advantage of switching perks and higher transaction limits.
Expert analysis: Why it pays to use a business bank account over a personal one
If you’re looking to switch your business bank account, plenty of choices are available. Consider any switching incentive that’s on offer, and make sure your new business bank account has all the right features and functionalities for you. You can use our best business bank accounts guide to help make your choice.
If your business is small enough, the Current Account Switch Service should make switching accounts painless.
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