Switching from a sole trader to a limited company account if you need to change your Mettle bank account

1. Gather the relevant data from your sole trader account

First, we’d recommend that you have the following information to hand for setting up your limited company account, which you can export or gather from your sole trader account:

• Trial balance of all your business’s accounts dated the day before the start of your most recent accounting year (this may not be needed if you've recently incorporated your business into a limited company)
• Exported list of contacts (names and email addresses of customers and suppliers)
• Details of individual debtors and creditors (this may not be needed if you've recently incorporated your business into a limited company)
• All data, attachments and files in your sole trader account to keep a backup on your own computer - the export file is for record keeping only and cannot be imported into the limited company account.

2. Set up a limited company account

Next, you’ll need to sign up for a 30-day free trial and set up a new FreeAgent account, choosing 'UK Limited Company' as the account type. 

If you've always been operating as a limited company, you may wish to choose the start of your most recent accounting year as your FreeAgent start date. You can import contacts, projects, out-of-pocket expenses and mileage claims that are dated on or after your FreeAgent start date, to save you from adding them again manually. Any that are dated before your FreeAgent start date would be entered as part of your opening balances instead.

If you've recently incorporated your business into a limited company, your FreeAgent start date will be the date of incorporation.

Opening balances

If you've recently incorporated your business into a limited company, all the opening balances in the new limited company account will be £nil because it's a new business. Therefore, you can skip to disconnecting your Mettle feed in your sole trader account.

If you've always been operating as a limited company, you’ll need to enter opening balances in the new limited company account so that FreeAgent can include them in your end-of-year accounts and keep your records accurate. These may include:

• Money your customers owe you (your accountant might call this 'trade debtors')
• Money you owe to your suppliers (your accountant might call this 'trade creditors')
• The balance(s) on your bank account(s)
• Money you owe to HMRC for PAYE and NIC, or VAT
• Opening share capital
• Reserves of retained profits or losses your business has built up over the years
• The balance(s) on outstanding loans

3. Disconnect the Mettle feed in your sole trader account

Once you have your limited company account set up, you’ll need to log in to the sole trader account and disconnect the bank feed.

Please ensure that the connection is also removed within your Mettle app as Mettle will only allow your feed to be connected to one FreeAgent account at a time.

4. Add the new bank account and enable the Mettle feed in your limited company account

Once your Mettle feed has been disconnected from your sole trader account and Mettle app, log in to your limited company account and add a new bank account in FreeAgent.

Enter your new Mettle limited company bank account details and give it a different name to your existing Mettle account, such as 'Mettle account (limited company)'.

Tick the 'Make this my primary bank account' box to make the new bank account your primary bank account in FreeAgent.

If you’ll be creating invoices, tick the 'Show these details on Invoices' box to display the new bank account details on the invoices.

Select 'Create new account' at the bottom of the screen.

Once you’ve added the new bank account, you’ll need to enable the feed for it.

Once you’ve done this, the footer colour at the bottom of your FreeAgent account will change, and the branding will display as Mettle. This will indicate that your account is now funded via your bank.

If you're not prompted to update your FreeAgent account after enabling the bank feed connection, you'll see a different notification when viewing the qualifying bank account in FreeAgent. Click on the 'Learn more and make the switch' link within the in-app message. Read more about switching to a funded FreeAgent account.

5. Delete your sole trader account or make it read only

Always operated as a limited company

If you've always been operating as a limited company, once you have your limited company account set up and have exported your data from the sole trader account, you’ll need to delete your sole trader account.

Recently incorporated your business

If you've recently incorporated your business into a limited company, once you have your limited company account set up, let us know by contacting our support team using the blue Help button at the bottom of the screen and we’ll make your sole trader account ‘read only’ so you can still access the data.

Next steps

You may find the following articles useful for getting your limited company account set up and ready to file end-of-year accounts and Self Assessment tax returns:

• Prepare for filing end-of-year Final Accounts and Corporation Tax returns
• Apply for a Companies House presenter account
• The Final Accounts report for micro-entities
• How FreeAgent handles Corporation Tax
• File end-of-year Final Accounts and Corporation Tax returns
• Self Assessment for limited company directors
• How FreeAgent populates the Self Assessment tax return for limited company directors