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From a finance and tax point of view, contractors are no different from other types of business, meaning that they can hugely benefit from having their own dedicated current account.
A business account is a great financial tool to get paid, manage expenses, and keep your finances in good working order.
If your business is set up as a limited company, then yes. As your business is a separate legal entity, its finances must not be mixed with your personal ones.
If you are set up as a sole trader instead, technically there is nothing stopping you from using your personal account for professional purposes. However, it’s not advisable because it will make it harder to separate the two things, work out how much you earn exactly, keep track of paid invoices and so on.
Using your personal account for business purposes is also likely to violate your bank’s terms and conditions.
Depending on the account provider you choose, you will be able to open the account in person or online.
You will need to provide both your business and your personal details and documents, including:
Eligibility criteria and required details and documents can vary from bank to bank. Best for Small businesses Best for Integrated accounting software Best for Beginners Best for Poor or no credit history
There is no such thing as dedicated business accounts for contractors, so you’ll have to make do with what the market has to offer to small businesses in general. Some things to consider are:
As a contractor, you might find it useful to have a look at online-only business accounts, especially if you don’t deal with cash and are comfortable with technology.
Online business accounts tend to be quicker to set up and cheaper, and pay particular attention to their mobile banking apps, which tend to work better and have more features.
Business bank accounts may sound complicated, but in fact it’s quite easy to get one for a small business, and it will help you organise your finances and manage them easily.
As a contractor, you probably want to look for a straightforward business account without too many frills, that can be accessed online in no time from wherever you are.
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