Walk into any branch and they will give you a binder or folder with useful tips on self-employment and a CD Rom with a business plan outline for free. Many high street banks now also offer free personalised business set-up advice. (Though they may not understand the complexities of the Visual Arts).

It is worthwhile noting that some high street banks do not charge for 'managing' your business account for the first twelve months. The finance sections of newspapers also offer good advice on bank, money and comparative deals such as the Guardian's Money pages.

It is not compulsory to have a business account in order to be self-employed and run a business. Transactions can be carried out through your personal bank account. However, it is more professional to have a business account and gives you a credible status and it is easier to separate your business and personal expenses. Trading out of one bank account can get confusing.

It is worth knowing that if you use your personal account for business purposes Her Majesty's Revenue and Customs (HMRC) now has greater powers to examine your personal bank account going back over several years if they suspect wrong doing. If HMRC desires it can investigate your business account should they suspect tax evasion or have other concerns. 

You are more likely to be successful in your application for a business account if you do not require overdraft facilities, and you have the support of your local Enterprise Agency. Usually you just walk into a local branch and ask to open an account or apply via their website. You will usually need a business plan (including images of artwork or products) or evidence of trading such as accounts, promotional materials or letter headed paper. It is now the case if you are on the electoral role and have a good credit rating you can open a business account online or over the phone, without the need for any evidence.

If you are worried about your credit rating you can check it via credit check website such as Experian. Unfortunately a poor credit rating can penalise you form setting up a business. However Natwest offers a business account to customers with poor credit rating, ask for details about their 'Foundation' business account.

Alison Branagan (© 2002)