Do I need a business bank account?
Updated 2026-07-03
If you've formed a limited company, yes in practice, the company is a separate legal entity and its money should be kept separate from yours. If you're a sole trader, you're not legally required to have one, but it's still strongly recommended, since mixing personal and business transactions makes tax returns and bookkeeping considerably harder.
| Structure | Legally required? | Practically recommended? |
|---|---|---|
| Sole trader | No | Yes |
| Limited company | Not explicitly mandated, but company money is legally the company's, not yours | Yes, essentially non-negotiable |
FAQs
Can I use my personal account for a side hustle?
Technically as a sole trader, yes, though a separate account (several are genuinely free) avoids a lot of admin pain later.
Which business accounts are free?
Several UK providers, including some fully licensed banks, offer accounts with no monthly fee, see our best business bank accounts guide.
References
Want this tailored to your situation?
Answer a few quick questions and we’ll recommend the setup that actually fits, with an honest reason behind every step.
Or browse all quick answers.