Do I need a business bank account?
Why a business bank account for tradespeople is the right tool to grow your business
Updated: June 2025
Why a business bank account for tradespeople is the right tool to grow your business
A business bank account Link opens in a new window makes organising your company finances a breeze.
But what exactly are the benefits and why should you have one?
What is a business bank account?
A business bank account is used solely for professional purposes and is completely separate from a personal bank account. They’re specifically designed for businesses, to help you better manage your revenue, expenses, debts and overall cashflow.
Our M Account for Business Trades Link opens in a new window has been specifically designed for tradespeople whether they’re a limited company, sole trader, start-up or partnership.
Do I legally need a business account?
Limited companies, registered with Companies House, are legally required to set up a business bank account. This is because the company is its own legal entity with its own obligations, and the profits legally belong to the company and are paid as dividends to shareholders.
72% of trade specialists we surveyed were set up as sole traders. Although sole traders are not legally required to have a business bank account, it can still be an incredibly helpful way to manage your business finances.
You can unlock free digital business banking, cashback, discounts, smart tools and easy switching. Find out more about the M Account for Business Trades Link opens in a new window or read on to find out why a business bank account is the right tool for your business.
Key benefits of a business bank account
1. Separates business expenses from personal expenses to simplify tax and VAT reporting
Keeping your business account separate from your personal finances makes things a lot more manageable, as you don’t need to manually split out your personal spending from your business expenses. This is especially true when it comes to your tax return, as bookkeeping is made a lot simpler. You can even integrate accounting software to improve your cashflow and get Quickbooks or Xero for 3 months fee-free when you open a new M Account for Business Trades.
2. Connects to invoicing and other business tools
Business bank accounts often come with a range of tools to help your business. Our M Account for Business Trades Link opens in a new window, for example, includes a free insights platform, and can be integrated with a number of market-leading tools and invoicing platforms to make payments quick and easy to manage from one simple dashboard. 67% of trade specialists we surveyed said their preferred method of taking payments was online and our partnership with Global Payments Link opens in a new window means you can take payments on the go, whether it’s on a mobile device or through online payment links.
3. Sets your business up for growth
Using a business bank account builds your company’s credit rating. This can be really helpful if you want to apply for credit (overdraft, loan, credit card, asset finance) in your company name in the future, whether it’s to buy a van to get around or essential equipment to get the job done. As part of our M Account of Business Trades account, you can access asset finance with our no set-up fee offer, saving £150.
4. Looks professional
Being able to invoice and make payments in your company name looks far more professional than from your personal account. It makes a great impression and shows you are running a legitimate and credible business, building confidence and trust with your customers as a result. This is especially important for larger jobs or commercial contracts.
5. Makes payroll easier
Business bank accounts make employee payments significantly easier and more efficient. Many accounts integrate with payroll software allowing for automated payments, and your employees will feel confident in the knowledge they are being paid from a business account with the company’s name on it.
6. Cashback and other benefits
It’s a common misconception that all business bank accounts charge a monthly fee. 47% of trade specialists surveyed said they used a personal current account to manage their business to avoid paying fees. However, Virgin Money’s M Account for Business Trades offers free day-to-day digital banking as well as 0.25% cashback on all debit card spend and an enhanced cashback offering of 0.5% on builders merchant purchases. It also offers a range of discounts on insurance products and breakdown cover to help keep your business running smoothly, even if something goes wrong.
So, now you know the benefits of a business bank account, what are you waiting for? Find out more about our M Account for Business Trades Link opens in a new window and Business Current Accounts. Link opens in a new window