If you're an entrepreneur, using the same bank account for your business and personal transactions can lead to muddled record-keeping and confusing tax returns. While the HMRC doesn't require sole traders to have a separate business bank account, it’s considered best practice for business owners.

As well as making it easier to keep track of your finances, it also makes it easier to grow your business—if you want to register your startup as a limited company, a business bank account will be mandatory, unless you want to register your business to your home address and make it publicly available information.

How to use a virtual office address for a bank account

When setting up a business bank account, you'll need to provide proof of your business address. However, if you don't have an office, you may be tempted to register your home address—but that can lead to all sorts of problems. Read on to learn why using a virtual office for a bank account is the best option for many entrepreneurs.

What is a virtual business address?

A virtual business address can be purchased from companies like Hoxton Mix for a small monthly subscription fee. As part of the service, you'll get a virtual address that corresponds with a real physical office in the UK. For example, when you choose Hoxton Mix, you’ll benefit from a virtual business address in a prime area of London, which will help establish your company's credibility.

Once you’ve secured your virtual office address, you can register it with the HMRC as a sole trader or with Companies House as a limited company. Depending on the service package you choose, any official post that arrives at the virtual business address will be handled and stored, and/or scanned and emailed to you, or forwarded to a specified private address.

Real address vs virtual address for business

If you're leasing a dedicated office building that's registered as a business address, then it makes sense to use that address when setting up a bank account.

However, many business owners, particularly with startups, haven't made that step yet. So, if you’re operating out of your own home, should you use your personal residence for registering your business, or would it be better to opt for a virtual business address?

A virtual address such as the ones provided by Hoxton Mix are accepted by the HMRC and will minimise the exposure of your actual home address to add a level of privacy and security. You can then also use this address for business banking so you have a single address for all business contact and correspondence. All of your mail gets sent to the virtual address, where it is processed and digitised and sent to your inbox.

When setting up your business, the main benefit of using your actual address is simplicity. As long as you can receive business mail at your personal address, if it's located in the same country your business is registered in then HMRC and Companies House will accept it.

But just because it's easy doesn't mean it's the best move for your business. When you register your personal address for your business it becomes publicly available. Anybody can look up where you live, and you may end up with HMRC representatives, nuisance calls and unexpected visitors at your residence.

Furthermore, even if your address does meet the legal requirements, your tenancy agreement or home insurance may include a clause that restricts you from using your home for business purposes.

One more point to consider: your home address won't carry the same level of prestige as a business address located in one of London's business or tech hubs. For example, with Hoxton Mix you can register your business to a central London location that offers your company credibility and professionalism.

Can you use the virtual address of a business for a bank account?

Yes, you can use a virtual address to create a business bank account.

You wouldn't be able to do this for a personal bank account, as banks require you to submit a residential address for verification, and submitting a virtual address instead of a residential one for personal account verification breaks the UK's money laundering regulations.

When opening a business bank account, you'll find that the bank requires proof-of-business-address documents, but most banks will accept HMRC and Companies House documentation as proof of address. So, just ensure that the virtual address you use for your bank account is the same one you registered for your business.
Hoxton Mix members will get access to free business banking and a £75 cash back with tide, our business banking partner. Another reason to sign up with us.

Step-by-step guide to using a virtual address for a bank account

So, if you’ve decided that using a virtual address for a bank account is the best option for your business, what do you do next?

The exact process might be a little different depending on which virtual office provider you use but, to make things simple, we'll walk you through how to set up a bank account with a virtual office address from Hoxton Mix.

Step 1: Ensure you have the right information

First, to get a virtual address for business, you'll need to create an account on Hoxton Mix. To do this, you'll need to provide some personal information:

ID documents and
Proof of address (residential, not business)

Without these documents, you won't be able to activate your virtual address service.

Step 2: Select your ideal virtual office plan

We keep it simple and offer a single plan that has all the essentials included in one price: virtual business address, mail scanning and digitisation along with the benefits of AI-powered document management. You can even come and collect your mail directly from our fully staffed office, as well as have specific mail items forwarded to you at a per mail item cost. All of this for £19 per month on our yearly subscription, or £22.99 if you bill monthly.

We offer some additional add-ons that are not essential but might be something you want to include:

Mail Forwarding—everything that you get in the plan, plus we will forward all of your post to a private address within one business day.Only available as an add-on to our virtual office. From £15 per month (billed annually)
Virtual Office Landline - get a prestigious virtual London 020 number with call forwarding to any UK, EU, or US number. No matter where you are, stay connected and ensure your business always looks professional. Only available as an add-on to our virtual office. From £5 per month (billed annually)

If required, in addition to your virtual office address you can rent meeting room space by the hour from our Shoreditch office.

After you choose a plan, you'll be get a prime London virtual office address. You can then register it with Companies House and HMRC as your business address, ensuring you can keep your personal address private.

Step 3: Choose a business bank account provider

Once you've registered your virtual office as your official business address, you're ready to choose a bank and to set up your business bank account.

Hoxton Mix is Tide’s dedicated virtual office partner, which means we’re able to offer our customers an exclusive deal when opening a bank account with a virtual office.

When you open a business account with Tide via our Marketplace you’ll receive a £75 bonus, plus one year of free bank transfers!

Step 4: Apply and secure your business bank account in minutes

Now all that’s left to do is apply for your virtual address bank account with Tide. Simply gather the required proof-of-business-address documents, such as a certificate of incorporation from Companies House, and open your account using the code HOXTON to claim the £75 bonus and free year of bank transfers.

Follow this link to get started.

Hoxton Mix partner with over 60,000 businesses

At Hoxton Mix, we strive to equip startups and entrepreneurs with the business tools needed for success. Our plans are affordable and offer a wide range of features that have helped thousands of businesses to thrive. Here are the reasons why you can consider Hoxton Mix your trusted partner:

Our top-quality postcode location gives an air of prestige to your business.
Our process is simple, and you can get your virtual office address in just 10 minutes.
We don't charge any set-up fees.
Flexible contracts where you can cancel any time
No mail handling charges; processing, scanning and delivering you the digitised versions is all included
Fully staffed office close to Liverpool Street where you can collect your mail, and our in-house support team will help you with any questions
Options to add on a virtual landline and to have all of your physical mail forwarded to you
Hoxton Mix customers get £75 and 1 year of free bank transfers with Tide. Open an account
We've partnered with Crunch to help you with new company formation – and for free, when you use our £10 promo credit!

If you're ready to set up a virtual business address for a bank account, come give us a try at Hoxton Mix! We're ready to take your startup to a whole new level.

Final thoughts

To sum up, using a personal address when setting up a business bank account might not be the best idea. You have to provide a proof-of-business address for a commercial bank account, meaning your business must be registered under whichever address you provide. PO boxes don’t count and can’t be used. Additionally,if your business is registered under your residential address, you are putting your privacy at risk and possibly violating your tenancy agreement.

Renting an office is also expensive, and it depending on your business type and maturity, it will probably be much more than you need. Especially, if you are a sole trader.

So, for many entrepreneurs, the best option is to use a virtual online address for a bank account. It gives you privacy, it’s suitable for Companies House registration, and you can receive your business post via whichever method you find most convenient. Additionally, the services provided help manage your mail and administration.

For the most feature-rich, customer-centric experience, set up a virtual office address at Hoxton Mix!

FAQ

Can I use a virtual business address to register for a bank account?

You can use a virtual business address to register for a business bank account but not a personal one. If you supplied a virtual address in place of a residential one, you would be violating anti-money laundering regulations. However, for a business bank account, you simply need to provide the address that your business is registered under. And since you can register your business under a virtual address, it is also suitable for a business bank account. To learn how to use a virtual office address for a bank account, just read the article above!

How else can a virtual address help my business?

Throughout this article, we placed a heavy emphasis on how virtual addresses safeguard your privacy, but there are many other benefits you can take advantage of too. For instance, if you use your personal address for business, receiving your personal and business mail to the same address can get really confusing, meaning important documents might slip through the cracks. Another benefit is that if you are a non-resident of the UK, a virtual address can help you do business there, as your business address must be in the same country as the registered company.

Are virtual business addresses legal?

Yes, virtual business addresses are legal. In the UK, you can use any address for your business, as long as it is: (1) tied to a physical address and (2) located in the same country that your business is registered in.

Can I open a bank account with a virtual address?

Yes, you can use a virtual address for a bank account, although only for business bank accounts. That’s because banks require you to submit a verified residential address when setting up a personal current account. When setting up your business bank account you’ll need proof-of-address documents, but most banks will accept HMRC and Companies House documentation, so make sure the virtual address is the same as the one you used to register your business.

Can I use my home address for a business bank account?

Yes, it is possible to use your home address for a business bank account if you’ve used it as your registered trading address, or if you’re a sole trader—although you may want to consider whether or not this will make your residential address public to your customers and suppliers.