UK Fact-File Part 7:
Individual Business Owner Welfare and Lifestyle

7.5 UK Individual Business Banking Services

Domestic and international banking services

All the major UK banks offer business bank accounts to suit the size of the enterprise. Banks do welcome new business clients but evidence of residency, identification and the viability of any new or existing business will be required. It is very difficult to open a UK bank account whilst resident overseas. New legislation in recent years governing money-laundering means that more checks are required by law before banks will open a new bank account.

For a sole trader, special business accounts for small businesses are available, often offering free transaction charges. It is important to separate business finances from personal finances, even for a sole trader. It is common to open a second business bank account to deal with transactions involving VAT, income tax and employee national insurance contributions. Personal ID will be required.

Limited companies must be set up and incorporated before attempting to open a business bank account. Copies of the Articles of Association and registration details must be produced and the directors of the company are normally required to be present when opening the bank account.

Theoretically the global nature of banking today (eg HSBC, Santander) should mean international banking business becomes easier. However, most 'high-street' banks have segregated their business banking into specialized units with the result that counter staff have almost complete ignorance of even the most elementary business practices, business-people are separated from the managers who are responsible for them, and any transaction other the very simplest is frustrating, expensive and slow. If your business or your personal assets are large enough, you may be able to find your way out of this trap by banking with a specialist niche bank.

One improvement at least has been the availability of e-banking, if only usually for UK domestic transactions. International payments remain highly bureaucratic, so that the use of credit cards or Pay-Pal is often preferable.