With more and more freelancers setting up in the UK, banks are continuingly looking at ways to be attractive to anyone setting up as one. Not only this, but more and more online banks are opening up dedicated solely to working with the freelance market.
As a result, we surveyed Freelance Heroes members to understand who they currently bank with, and will look over the coming years how the landscape may change.
How Vital is Having a Separate Bank Account When Running a Freelance Business?
Firstly, let’s look at why having a separate bank account is so critical for freelancers. Elaine Clark, founder of Cheap Accounting, told us “Not having a separate business bank account means that there is much more risk of confusion between your business and personal costs and income. Your accounting will take longer as there will be more transactions to account for, many of which will be irrelevant for your business accounts.” She added, “It also means that if you are using an accountant or bookkeeper they will see details of your private spending. Finally if HMRC do investigate your business, you may need to give them access to your bank statements; so they’ll get to see everything too.”
What if you’re a limited company? Elaine responded “If you operate via a Limited Company whilst there is no legal requirement to have a separate business bank account the company will need one as it is a separate legal entity. The money is not yours – it is the company’s and must be accounted for in the books and bank accounts of the company.
Who Do UK Freelancers Bank With?
While we’re seeing an increase in freelance dedicated banks and accounts, most do currently bank with the bigger, more well-known companies. For now, anyway.
We didn’t ask if respondants were happy with their choice of bank or not. That’s probably one for a future poll.
Here are the results in a list.
What about you?
Who do you bank with? What is your experience like with them?
We’d love to hear from you at @FHChat on twitter or in the Freelance Heroes Facebook Group, at https://www.facebook.com/groups/freelanceheroes