Do freelancers need a current account to receive payments?

This page provides general information only and is not legal advice.

Allowed with conditions

Summary

Whether freelancers need a current account to receive payments may depend on various factors including banking regulations, nature of transactions, frequency and volume of payments, and applicable banking policies. Different types of accounts may be suitable depending on the circumstances.

Law or Regulation Involved

This generally relates to banking regulations governing account types and usage, as well as provisions under the Income Tax Act regarding reporting and documentation of business income.

Key Conditions / Exceptions

• Banking regulations and policies may have provisions regarding account types for business or professional activities.
• Requirements may vary based on the nature of freelance work, transaction patterns, and volume of payments.
• Some financial institutions may have specific policies or requirements for certain types of transactions or account usage.
• Tax reporting and documentation requirements may differ based on account type and transaction patterns.

Risk If Ignored

If applicable banking regulations or institutional policies regarding account types are not complied with, this may result in account restrictions, transaction limitations, notices from financial institutions, or other consequences. Non-compliance with tax reporting requirements may also apply.

When to Talk to a Professional

You may want to consult a Chartered Accountant to understand tax reporting implications of different account types, and your financial institution to understand their specific policies and requirements for account usage.

Last reviewed: 2025-03 | Version: 1.0