It used to be simple to set up a simple business account, but today ID checks and tough measures to get approved, means the small indie shopkeeper or online entrepreneur may have trouble even getting an account, especially if you don’t want to pay huge fees. If you work from home you likely want a virtual business address (for privacy), so here’s a look at how to simply set up a business account to go alongside it.
If you are in debt, call Business Debt Helpline for free help (open 5 days a week). The charity Stepchange also can help sole traders. Also learn how to how to sort your tax out. There is also lots of financial help for small farmers (including one that offers free feed & bedding for animals, if you are struggling).
Simplifying ID for Business Accounts
Bev Davies for Green Pebble
Due to money laundering, you will have to prove your ID before setting up a business account. You’ll likely need a driving license or passport, and take a selfie to compare you to the photo, before being approved. Some post offices will take the photo for you and send it off, if you don’t own a smartphone or get your photos online. You may also need some form of address ID (like a bill or bank statement), all dated recently.
Simple Online Business Accounts (smartphone needed)
If you have a smartphone, this is the simplest option, as you can set up an account in minutes:
- ANNA offers points that you can earn to pay for things like train travel, and you also get a web page with link to your personal profile, where you can also do your taxes. Costs are very low
- Monzo has a lite (free) version of its simple online bank account, and you get Tax Pots to put money aside and award-winning customer support. There is a small charge to pay cash in at Paypoint.
- Starling Bank offers a digital account used by over 400,000 businesses, with free 24/7 app support and no monthly fees. Or for a small monthly fee you can sign up for a Business Toolkit to create invoices, do your taxes and record VAT. There are also accounts to deal in Euros or US dollars.
- Sum Up is another digital business account with free bank transfers, invoice tool and Mastercard for business expenses. You can also link your card with Apple Pay or Google Pay to pay at millions of locations.
- Tide has over 350,000 business customers. Create statements and manage direct debits in the app, schedule payments and export transactions. You can also instantly link to accounting software, and review account limits (and request changes) in the app.
Ethical Business Accounts
These are not instant, so you’ll have to go through the usual rounds of getting approved. But at least you know in these cases, your money is being used to do good.
- Triodos is Europe’s largest green bank (it has its critics due to the (biodegradable) card often being declined, due to fraud checks. Based in Bristol (calls answered by real people), the founder is a conservationist and business accounts are presently only offered to customers with a turnover of £5000 or more. You do however receive information on where your money is invested – mostly in clean energy, clean energy, organic farming and social enterprises.
- Reliance Bank is owned by the Salvation Army, so profits help homeless people. Lending mostly to companies that deliver positive social impact, you get free banking for the first 6 months (subject to conditions), a visa debit card, Internet banking and access to high street banking services.
- Unity Trust Bank uses deposits to fund lending that helps communities. The local team answers calls and your relationship manager can help. This Carbon Literate Bank is part-owned by all employees who are offered up to 5 paid days a year to volunteer in their area. It also pays a real Living Wage and pioneers Fair Tax.
- Co-operative & Community Finance lends to business that create social benefit, serving co-ops and social enterprises. Lending for over 45 years, rates are good and they don’t require personal guarantees. They currently have £4m of capital to lend, and also manage loan funds for other lenders.
Simpler Alternatives to Paypal
Paypal may be used by millions, but has many critics (1 star average over 20,000 reviews). Some simpler alternatives you may wish to explore include: