It’s not a legal requirement for sole traders to have business bank accounts. It’s fine if you use your own personal bank accounts. However, there are a number of benefits of setting up a business account if you are self-employed or a sole trader:
– Instead of mixing up the personal and business income and expenses, having a separate bank account helps to have a better understanding of the cash flow for the business. Otherwise, it would be time consuming when you try to identify which one is personal money and which one is business money, and it’s also very likely to make mistakes in this way.
– It makes the self-assessment tax return preparation a lot easier.
– Having a separate business account also helps to get funding when the business grows.
– Looks more professional.
