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I notice that business bank accounts are always mentioned in these sorts of lists. To me they seem like an extra overhead for no reason. You essentially have to ask a bank's permission and pay them just so they can accept your payments? So weird.

I could understand it if you had a business with employees and you sold products on a daily basis with loads of transactions, or if you plan to get into debt... but for invoicing someone every month? Personal account seems fine, and I'm sure people have several of them already.

The business is a separate legal entity to you. A business bank account clearly demarks what is your money and what is not. I wouldn't be at all surprised if it's a requirement to work with a lot of companies, if not a legal requirement for working with a ltd company.

Business bank accounts can be had for free - most contractor-friendly accountants have an arrangement with Cater-Allen, for instance.

It's not a legal requirement and they're certainly not free AFAIK.

It is a requirement for partecipating in certain contests (eg: Microsoft had a program for investing in indie games company and they required to use a business account entitled to the company) but I still haven't heard such requirement from a client.

>> It's not a legal requirement

I'd be surprised if it wasn't a requirement with many clients though, it shows a level of professionalism.

>> and they're certainly not free AFAIK.

You haven't looked very hard then...

> I'd be surprised if it wasn't a requirement with many clients though, it shows a level of professionalism.

Agree, but I've never seen such clause in a contract.

> You haven't looked very hard then... I guess it's a service provided by only certain accountants? All the (chartered) accountants I've talked to never offered a free business account. They offered introduction to paid business account but that's the usual.

If it's not and there is a free business banking account with a reputable bank out somewhere I'll be happy to look into it.

Ok so the the two things I know of are that HSBC will give you a free intro year or two (but that's obviously only useful for a year or so) and that most contractor-specialising accountants have some sort of promotion/deal on with Cater-Allen to get you free business banking at their private bank.

Agree, after all it's just a way to keep expenses and earnings separated from your everyday transactions.

They are not required by law (here in UK) but they're suggested by pretty much every accountant out there. I don't use a business account when working for myself, but I do use one for a company I've founded with other people.

I'd say it's more useful when it's not a one-man ltd.

HMRC like it and so do most accountants. While not a legal requirement it saves trouble if you ever get investigated (otherwise you have prove what each outgoing payment was).

Cater Allen is practically free, I think there is some sort of minimum average balance but if you keep both a rainy day and your tax payments in there it's a trivial task.

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