If an individual, who is a foreign national, moves to the UK and wants to set up a business in the UK, one of the foremost thing needed to carry out business activities is a dedicated business bank account (others being business registration number; VAT number etc.). However, as most of the banks are making the process stringent, along with being streamlined, it might become a little difficult to open a business bank account if an individual does not have a UK passport. A ‘non-UK resident’ is a person who does not stay in the UK permanently or does not have a permanent UK address. In other words, the term ‘non-resident’ is applicable to a foreign national or British expatriate living in the UK. According to HM Revenue and Customs (HMRC), the UK citizenship more often than not is dependent on the number of days an individual has spent in the UK during a tax year (for reference, a tax year begins from 6th April of a year to 5th April of the subsequent year).
An individual is considered to be a resident by the UK law if either:
- An individual’s only home was in the UK which means he / she possess, or rented a house for at least 91 days or spent a minimum of 30 days in the house for a given tax year
- He / she has spent 183 days or more in the UK in a given tax year
On the other hand, an individual will automatically be not considered a resident of the UK, if either:
- He / she has spent less than 16 days in the UK (or a period of 46 days if he / she has not attain the UK resident status for the prior 3 tax years)
- An individual works in a foreign country full time (average work hours equivalent to a minimum of 35 hours per week) and stays for a minimum of 91 days in the UK
When an individual travels in or out of the UK, the tax year is more often than not divided into 2 parts – a resident part and a non-resident part. Under this treatment, an individual only pay UK tax on foreign income for the time-period he / she has spent in the UK. This is referred to as ‘split-year treatment’.
Although it isn’t imperative to stay in the UK in order to open a UK business bank account. However, it’s suggested to attain UK residency prior to applying for a business bank account. Certain banks in the UK may deny the application on the fear of fraud except if a company director has UK citizenship.
Documents required to open a UK bank account
An individual will be required to establish his / her identity and place of residence in the UK; this rule is applicable for opening a bank account either at a branch or online. In order to prove ones identity, an individual will be required to produce their identification documents – driver’s license; or passport; or ID card ready. Additionally, an individual will also have to provide proof of the place of residence which means an individual will be required to submit either one of the following
- A rental agreement or mortgage papers
- A current tax bill
- A latest convenience /utility bill (water; electricity; gas; sewage etc.)
- Latest credit card or bank bill
In case an individual has recently moved to the UK, it is doubtful that an individual will be able to produce these documents
However, in case of opening a personal bank account in the UK for a non-resident such as a student, for example, certain banks in the UK given acceptance to a letter from the university’s admission office authenticating the address of an individual. In addition, to the above mentioned documents, there is one more option for individuals who have recently moved to the UK – a letter from the Jobcentre Plus (an organisation in the UK that assists individuals in getting a job, benefit or both – Parent department: Department for Work and Pensions) validating an individual’s National Insurance (NI) number. On the other hand, DNS Accountants recommend that an individual can go to their bank and apply for a change of address to a new UK residence address (doing so is even possible online). If the new address is correctly updated on the bank system, an individual can ask the bank to post a bank statement to the new UK address and this bank statement can act as a new UK proof of address for an individual.
How to open a bank account in the UK, before arrival
Having a bank account before arriving to the UK is also possible! An individual can approach their home country bank which may have the capability and facility (having a parallel bank relationship with a UK based bank) to setup an account for an individual. Also, most of the major UK based banks have an ‘international account’ proposal which is planned particularly for non-residents of the UK. This is a good alternative of getting a UK bank account, if, through traditional means (providing proof of address records) is unfeasible. Non-residents of UK can even apply online with banks such as Barclays, Hong-Kong and Shanghai Banking Corporation (HSBC) Lloyds bank, and National Westminster Bank (NatWest) have international accounts created specifically for non-residents.
However, this may not be a viable option there they to additional charges for big deposit and monthly deposit commitments. These additional special monthly fees can make all of this costly in particular when an individual is seeking permanent employment.
Limited company and UK bank account for a non-resident
For a limited company, a business bank account makes finance management more accurate and transparent; there are no lawful restrictions that make illegal a non-UK resident to open a business account. However, the majority banks may not acknowledge applications from out of the country due to fraud apprehensions and the supplementary administration costs
Business account options with leading UK banks for non-UK residents
Its bank accounts for UK non-residents can provide non-residents with everyday banking needs in the majority of places around the world. The bank accounts for non-resident clients are planned in such a way that it enables them to operate globally and offers a range of facilities that are expected from a chief international bank. Through its International Bank Account, an individual can trace the bank account in the UK, or from an offshore centre (the approach will depend on which is best for the financial plan requirements). An individual can opt for an international bank account in either of three chief currencies, dollar, euro, and sterling, and hold funds in the UK, Jersey or the Isle of Man. This account comes with telephone and online banking and permission to operate the Barclays Mobile Banking app
The bank presents a ‘business banking account’ that may perhaps be appropriate for a UK registered limited company, which has all non-UK residents. In order to be eligible for this account, the directors must provide a copy of their identification proof (i.e. passport) along with an evidence of their residence address
The bank offers a bank account for a limited company run by non-UK residents (basic requirement being that atleast one of the directors must be a resident of the UK) and the application can be made either by telephone or online. Copies of passport and proof of address will need to be submitted at a registered Lloyds bank (all documents must be officially certified before presenting them at the bank)
Like other banks, NatWest too offers an account for non-UK residents and the account comes with access to telephone banking and online banking. Documents such as a copy of passport and proof of address will be required (all documents must be officially certified before presenting them at the bank)
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