Can I use my personal account for business?

Not everyone goes into business on their own with the intention of building a multinational brand – and certainly not everyone starts out that way.

For many people, registering as a sole trader is about taking some control over their professional life, striking a better work-life balance, or even just getting paid a fair amount for the work you do.

So it’s no surprise that a lot of sole traders don’t want to face the costs and complexities of business banking – paying fees just to deposit money, filling in endless forms, banking procedures that seem completely alien and so on.

And that’s assuming you even qualify for a business bank account – not all accounts are even designed to be used by sole traders, which can leave you feeling shut out from managing your own professional finances effectively.

Can I use my personal account as a sole trader?

It is perfectly possible to accept payments as a sole trader into your personal current account, and plenty of people do it.  However, it is not a recommended way to manage your finances.

One disadvantage of using a personal account for business purposes includes a lack of transparency, as it can be harder to track what’s coming in or going out for business purposes, versus everyday spending or even cash sent to you as a birthday or Christmas gift, for example.

It can also make your year-end accounts harder to compile, compared with having a separate business account that keeps track of all your relevant income and expenditure in one place.  So if you’re not very confident about self-assessment tax, opening a separate business account could actually cut your admin overall.

Finally, you should be very cautious about using a personal account for business purposes if there is an overdraft or other form of debt associated with it – as a sole trader you will generally be liable for your business debts anyway, but you should not be using a personal credit card to fund a failing business.


With the Arro Money account, its straightforward.

Alternatives to a business account for a sole trader

Arro Money accounts offer an easy alternative to business bank accounts for sole traders.

You can apply and get approval in just five minutes and an Arro Business Account makes a great secondary account for any sole trader finances you want to keep separate.

We offer a clear and simple fee structure, so you only need to pay for the transactions you actually carry out – and we don’t charge you for receiving money into your account.

You also receive a MasterCard® debit card you can use for online and in-store card payments, and to withdraw cash from ATMs, plus an online dashboard so you can send Faster Payments and Direct Debits to pay for any business expenses in a way that is easy to track.

Paying sole trader tax from an online account

Finally, when your tax bill is due, you might want to consider paying it directly from your Arro Money account – just use the details on the back of your tax bill to pay as an online transfer using your unique taxpayer reference.

If your tax bill is over the threshold for payments ‘on account’ HMRC will ask you to pay half of your tax for the year by the end of July, so again having an online account makes it easy to meet this deadline, especially in the first years that you are asked to pay in this way.

You might even want to set up a standing order to pay a regular weekly or monthly amount over to HMRC, leaving you with a much smaller balancing payment to make at the end of the tax year and avoiding the temptation to spend that money on other things in the meantime.