Yes, a limited company can have more than one bank account, and there is no legal limit on how many it can hold. Section 39 of the Companies Act 2006 protects a company’s capacity to enter into contracts, including banking contracts, and no separate banking rule caps the number of accounts a company may open.1Legislation.gov.uk. Companies Act 2006 Section 39 Most companies start with one current account and add others when a specific need appears. The decision is practical rather than legal: each new account earns its keep or adds admin for nothing.
Directors do carry a duty to act in the way they consider most likely to promote the success of the company, so opening an account should serve a genuine business purpose.2Legislation.gov.uk. Companies Act 2006 Part 10 Chapter 2 – General Duties of Directors In practice, almost any reasonable operational justification meets that bar.
Reasons Companies Open a Second or Third Account
The most common reason is tax ring-fencing. Moving corporation tax, VAT, and PAYE liabilities into a dedicated account as they accrue stops that money from being spent on operating costs. Directors who run everything through one account often find that a healthy-looking balance is largely money owed to HMRC.
Other reasons that show up regularly:
- Spreading deposits across banks to stay inside FSCS protection limits.
- Holding foreign currency balances so international income doesn’t need constant conversion.
- Keeping client money separate from operating funds, which some regulated businesses must do.
- Splitting payroll, supplier payments, and incoming revenue into distinct accounts to make reconciliation faster.
Deposit Protection Across Multiple Banks
The Financial Services Compensation Scheme protects deposits up to £120,000 per eligible depositor, per authorised institution, for firms that fail after 30 November 2025.3FSCS. What We Cover Two accounts at the same bank share one £120,000 cap. Only accounts at different authorised institutions extend cover across a larger total balance.
Not every company qualifies. Large companies that exceed certain size thresholds are excluded from FSCS protection, so directors of bigger firms should check eligibility directly with the FSCS before treating this as a reason to spread deposits. For small and medium-sized limited companies, cover applies in the same way it does for individuals.
What You Need to Open Another Account
Requirements vary by bank, but the core paperwork is consistent:
- Certificate of Incorporation.
- Company registration number.
- Identification for every director and for shareholders holding more than 10% of the business.4Business.gov.uk. Opening a UK Business Bank Account
- A board resolution approving the account. Some banks supply a template; others accept a resolution signed by a director or company secretary.
- A description of the business activity and expected turnover.
These checks exist because banks must carry out customer due diligence under the UK’s anti-money laundering rules, identifying beneficial owners and understanding the source of funds.5GOV.UK. Your Responsibilities Under Money Laundering Supervision Before applying, check that the company’s filings at Companies House are up to date. An overdue confirmation statement or missing annual accounts often triggers an automatic rejection.
How Long It Takes
According to official government guidance, opening a UK business bank account typically takes four weeks to three months once meetings and checks are factored in.4Business.gov.uk. Opening a UK Business Bank Account Digital and challenger banks are sometimes faster; traditional high-street banks tend to sit at the longer end, particularly for companies with complex ownership or international elements. If you need the account live by a specific date, start well ahead and have all documents ready before you apply.
The Bookkeeping Cost of More Accounts
Every extra account increases the record-keeping load. Section 386 of the Companies Act 2006 requires every company to keep accounting records sufficient to show and explain its transactions and to disclose the company’s financial position with reasonable accuracy at any time, including day-to-day entries of all money received and spent.6Legislation.gov.uk. Companies Act 2006 Section 386 With money flowing through several accounts, meeting that standard takes real discipline.
Annual accounts filed with Companies House must reflect the company’s whole financial position, so balances and activity in every account need to be captured.7GOV.UK. Life of a Company Part 1: Accounts
Tax Accuracy When You Have Several Accounts
Corporation tax returns must reflect all income and expenditure across every account the company holds. Interest earned on savings or notice accounts counts as taxable income even if it is never withdrawn. HMRC does not require a dedicated tax account, but keeping one is one of the most reliable ways to avoid spending money owed to HMRC.
Errors in corporation tax returns carry penalties that scale with fault. A careless mistake, such as omitting interest from a forgotten savings account, can attract a penalty of up to 30% of the extra tax due. Deliberate understatement pushes that to 70%, and deliberate concealment raises the ceiling to 100%.8GOV.UK. Penalties: An Overview for Agents and Advisers The more accounts a company operates, the easier it is for one to slip through at year-end. Monthly reconciliation across every account is the simplest safeguard; catching a missing account in January costs far less than an HMRC inquiry later in the year.