Setting Up In The UK: Why Is A Bank Account Required?

When setting up a company in the UK, we look to understand why a bank account is required and what sort is needed. A ‘real’ bank account or a designated Client Trust Account (CTA). A real bank account can take around three months (minimum) to open, whereas a CTA can be operational within 10 working days.  

As Paul explained at the UK Department for International Trade event in Melbourne, “the official line is that opening a bank account takes three months but we’ve seen it take nine months!” A bank account in the UK cannot be achieved unless you have a UK resident director with supporting documentation or growth plans that can support that with a substance such as £2.5m turnover.  

The UK banking system can be seen as draconian and can be a case of us convincing the banking partner why they should open an account for you rather than the other way around. As part of our service of setting up a UK bank account, we register what we call a Client Trust Account (CTA), which is often referred to as a solicitor’s holding account or an ESCROW account. The client does not have any direct access to it but it is there for you to fund by the parent company and we can process payments through this account on your behalf. Payment such as payroll, HMRC taxes, supplier payments, or returning of funds to the parent company, if required, can be performed through this account.  

UK banks must undertake customer due diligence, prior to setting up a bank account for their new customers. This is part of the anti-money laundering (AML) regime and is a key requirement of the Money Laundering Regulations 2007 in the UK. 

Key shareholders together with those individuals who will be named on the UK bank mandate will be asked to prove their identity and home address, with documents such as these: 

• Proof of ID: passport, UK photo driving license or national ID card 
• Two forms of Proof of address: recent bank statement or utility bill, or council tax statement. 

If you’re applying from abroad, you will be asked to provide notarised translations of your ID and documents used to prove your address. If any of these documents are not in English, they will need to be translated. 

If there are any trusts of ownership that sit at the top of your ultimate beneficial structure, copies of trust deeds would also be required. These documents would also need to be notarised, whether that’s by your CPA or a notary public.   

OpenPay 

“Ed got in touch with us 18 months ago and while OpenPay is very successful in Australia, there’s very little in the UK at this point.  They’d been in touch with a banking provider and the provider in the UK high street bank had basically rejected them and Ed was Googling I think one evening at home and stumbled on our website and there’s some guides on there about opening a bank account and a checklist for everything a bank account.  He got in touch and told me what they were trying to do in the UK, what they’d already established in Australia and I said ‘Leave it with me’.  Within 6 months, maybe 8, they had an operational bank account and were running through one of our Client Trust Accounts throughout that period of time.” 

For further support on how we can assist setting your company up in the UK, please do get in touch.