Business Banking

Writing Magazine – April 2024

Does the thought of having a business bank account for your writing business fill you with a fear of transaction charges and monthly fees? Well, fear no more, for it’s not like that, as I discovered over the last twelve months.

If you’re selling the occasional article, poem, or short story, or you’re in the process of self-publishing your first book, your writing might not feel like a business. However, if you’re generating an income and incurring expenses, no matter how small, then it is a business and the sooner you treat it as such, the better.

As we approach the start of a new financial year, now is the perfect time to review the bank account set-up for your writing business. Having a separate bank account for any writing income and expenses makes sense. Not only does it make completing your annual tax return simpler because everything is in one place, His Majesty’s Revenue and Customs prefer it, too.

Mixing your personal and business expenditure in one bank account can make things much more complicated at the end of a tax year. Trying to remember which was a business transaction and which was a personal one isn’t easy if you don’t keep detailed records. For this reason alone, if you do nothing else, at least set up a separate bank account for your writing business.

By law, limited companies must have their own business bank account. However, most writers are sole traders, not limited companies, so legally we don’t need a business bank account. For many years, I, like many writers, used a second personal current account to separate my writing money from my personal finances.

While I wasn’t breaking the law, I may have been in breach of the bank’s terms and conditions because many state that a personal current account cannot be used for business purposes.

Sole Traders

This time last year, I opened a business current account as a sole trader. I’d put this off for several years because I was reluctant to pay a monthly fee and any transaction charges. Although many banks offer free banking for the first year, I still wanted to avoid any charges if I could. After all, I want to keep as much of my writing income as possible!

Some of the new branchless, online-only banks now offer free banking for sole trader business accounts, so I switched to one run by Starling Bank. Other banks offering free sole trader business bank accounts include Monzo, Mettle (part of Natwest), Revolut, and Virgin Money.

Sarah Stuart ( is an editor, proofreader, copywriter, and the author of Two of a Mind, a fast-paced mystery for young adults. After her first book was published, she decided to open a business bank account. Like me, she opened one with Starling Bank.

‘I set up the business account in June 2020 because I wanted to keep my writing funds separate from my personal funds,’ she explains. ‘It was amazingly easy. I am with Starling Bank and already had a personal account with them. So when I wanted to open a business account, it was simply a case of clicking the virtual “Open a new account” button and the choices included “Sole trader account” and “Business account”. For my writing business, I use the sole trader account and can access both accounts within the same app.’

Quick Application

I also found the account opening process quick, even though I was not an existing Starling Bank customer, like Sarah. First, I had to download their app to my smartphone. Then, after giving them my personal details, I answered a few questions about the type of business I operate and told them some of the businesses I would be receiving money from. Then I uploaded a photo of my passport for identification purposes and recorded a short video. (Don’t panic, it’s not as bad as it sounds—you’re not auditioning for Britain’s Got Talent!)

Within minutes, the identification process was complete, and my account was open. My debit card arrived a few days later, along with a PIN, which I could change at any cash point machine.

As part of the account opening process, I used the current account switching service, which transferred all of my direct debits and balance across. Even though I was transferring a personal current account to a business current account, this went without a hitch, because both accounts were in exactly the same name.

This was important because I wanted to make sure any money inadvertently sent to my old account was automatically rerouted to the new one. Although I’d made a list of organisations I needed to advise about the change in account details (such as ALCS, and PLR, as well as my regular clients and traditional publishers), I wanted to make sure that nothing got lost in the system.

This is why the sooner you set up a business bank account the better. It may seem a little over the top to begin with, especially if you’re only entering short story competitions or writing a few articles, but nobody knows what might happen in the future. Making the switch later, when we have several business relationships with many writing organisations, can make the process more complex.

Security Checks

Even though using the current account switching service notifies organisations of your change in bank details, it’s worth being proactive about this. Go through your financial records for the last two or three years to identify all those businesses and organisations that have paid you money in the past and may pay you again in the future. The writing business is not always about regular monthly payments. Some traditional publishers only pay royalties once a year, and less frequently if royalties haven’t reached a minimum payment threshold.

Allow time for this. The security checks my customers undertook varied considerably. Some simply emailed me a form to complete with the new bank account details and then asked me to return it by email. Others wanted to see the top half of my business bank statement confirming my name and address, the bank’s logo, along with the new account details. A few wanted to speak to me by phone to confirm the change of bank detail request was legitimate.

Account Overview

One difference between using a personal current account and a business account is that the business bank account apps allow you to categorise payments. These can be tagged with the common business expenditure classifications we can use to set our legitimate writing expenditure against tax, such as Marketing, Travel, Professional Services, and Admin.

This allows the apps to provide an instant overview of income and expenditure for the month to date, and also for the day. My Starling app shows me what my balance is, how much I’ve spent so far this calendar month, and in which expense categories.

Sarah also finds this useful, and that the information from her business bank account connects with other tax accounting software she uses.

‘I have an instant snapshot of what I have spent and what I have earned without having to sift through all the domestic spending and salaries that go into my personal account,’ she says. ‘It helps keep tabs on my spending and is useful for showing income trends. I also use Xero accounting software that the account directly feeds into, so I have almost real-time reports available for profit and loss, balance sheet, income versus expenses, bills to pay and invoices raised. A separate business account is essential if you, your bookkeeper and/or your accountant want to have all the relevant transactions readily accessible for any statutory returns, such as VAT or self-assessment.’

And just like our personal business accounts, we can set up notifications on our devices to inform us immediately when any money goes in or out of the account.

Credit Card Drawback

One drawback I have experienced since opening my business bank account relates to my credit card. I used to pay for occasional online business expenses using a personal credit card. When the credit card statement needed paying, I simply paid the value of any business transactions directly from my new business current account. However, the credit card issuer knows from what type of bank account a payment is coming, and they notified me that it couldn’t accept payments from a business bank account in the future. Instead, I now use my business bank account debit card for online purchases.

So far, Sarah’s business bank account has been problem-free. ‘I haven’t had any issues with my own sole trader business bank account. I have had past experiences with a high street bank and Limited Company accounts that created several major headaches, but they were more related to customer service than any issues about running separate accounts.’

Potential Charges

Even though many of these digital banks don’t charge a monthly fee for having a business bank account, nor do they charge for receiving bank transfers into your account or making payments, there may still be some transaction charges. For example, Starling charges a 0.7% fee (minimum £3) for paying in cash at a Post Office.

While I sometimes deal with cash at author book events, I avoid paying the charge by transferring the cash equivalent sum from my personal current account into my business account. Then I put the cash into my wallet for personal use.

So now there’s no excuse for not having a separate business bank account for our writing business. Ultimately, it also shows a level of professionalism by demonstrating that we expect to be paid for our writing. 

Separating our business transactions from our personal finances saves time when completing our self-assessment tax returns. So, the sooner we can deal with that, the sooner we can get back to the real business of writing.

Business Directory – Banks Offering Monthly Fee-Free Sole Trader Business Accounts

Starling Bank:




Virgin Money:

© Simon Whaley