{"id":29,"date":"2014-10-25T05:28:36","date_gmt":"2014-10-25T05:28:36","guid":{"rendered":"https:\/\/www.1stchoice-formations.co.uk\/blog\/?p=29"},"modified":"2022-08-04T06:37:36","modified_gmt":"2022-08-04T06:37:36","slug":"why-your-company-needs-a-bank-account","status":"publish","type":"post","link":"https:\/\/www.1stchoice-formations.co.uk\/blog\/why-your-company-needs-a-bank-account\/","title":{"rendered":"Why your company needs a bank account"},"content":{"rendered":"<p>Companies are not legally obliged to have a bank account. The owner of a company can conduct its banking activities through his personal bank account. However,notwithstanding the legal position, there are several compelling reasons for a company to have a bank account:<\/p>\n<div class=\"dsd\">\n<ul class=\"number\">\n<li>\n<h4>Where the company in question is a personal service company for a contractor.<\/h4>\n<p>Agencies will not pay fees into a contractor\u2019s private bank account. To do so risks putting them in breach of  PAYE and Employment law regulations.<\/li>\n<li>\n<h4>A company\u2019s relationship with its customers.<\/h4>\n<p>A company\u2019s customers will be unwilling to pay money into a personal bank account. If they do, they risk jeopardising their legal position in relation to orders placed with that company.<\/li>\n<li>\n<h4>Risk of personal liability.<\/h4>\n<p>A trader who pays customers\u2019 money into his own account, risks personal liability. This is especially the case where;<\/p>\n<ul class=\"uldisc\">\n<li>The company is insolvent, or<\/li>\n<li>The customers make claims for negligence, faulty goods, damages and penalties.<\/li>\n<\/ul>\n<\/li>\n<li>\n<h4>Banking relationship.<\/h4>\n<p><a href=\"https:\/\/www.1stchoice-formations.co.uk\/blog\/business-bank-accounts-for-uk-companies-5-things-you-should-know\/\" title=\"Business Bank accounts for UK companies-5 things you should know\" target=\"_blank\" rel=\"noopener noreferrer\">Business bank account<\/a> charges are higher than personal account charges. A bank will not tolerate for long, a personal bank account being used for business purposes.<\/li>\n<li>\n<h4>Taxation of loans to directors.<\/h4>\n<p>A person holding money on behalf of a company is effectively borrowing from that company. UK resident tax payers risk being assessed to tax and NI under Section 455 of the Corporation Taxes Act 2010.<\/li>\n<li>\n<h4>Loss of tax relief on expenses.<\/h4>\n<p>Without a company account, a director will have to pay expenses through his own bank account. As a result, some expenses will not be in the name of the company. Bank overdraft interest and charges, credit card interest and charges, are examples. The trader takes the risk that these charges will be disallowed for tax purposes, resulting in a higher tax bill.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Companies are not legally obliged to have a bank account. The owner of a company can conduct its banking activities<\/p>\n","protected":false},"author":2,"featured_media":278,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-29","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-bank-account"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why your company needs a bank account - 1stchoice Formations<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.1stchoice-formations.co.uk\/blog\/why-your-company-needs-a-bank-account\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why your company needs a bank account - 1stchoice Formations\" \/>\n<meta property=\"og:description\" content=\"Companies are not legally obliged to have a bank account. The owner of a company can conduct its banking activities\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.1stchoice-formations.co.uk\/blog\/why-your-company-needs-a-bank-account\/\" \/>\n<meta property=\"og:site_name\" content=\"1stchoice Formations\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/1stchoiceformation\" \/>\n<meta property=\"article:published_time\" content=\"2014-10-25T05:28:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-04T06:37:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.1stchoiceformations.co.uk\/wp-content\/uploads\/2014\/10\/Business-Bank-accounts-for-UK-companies-5-things-you-should-know-300x200-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"200\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"1stchoice Company Formations\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@1stCBS\" \/>\n<meta name=\"twitter:site\" content=\"@1stCBS\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"1stchoice Company Formations\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.1stchoice-formations.co.uk\/blog\/why-your-company-needs-a-bank-account\/\",\"url\":\"https:\/\/www.1stchoice-formations.co.uk\/blog\/why-your-company-needs-a-bank-account\/\",\"name\":\"Why your company needs a bank account - 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