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Promoted
Virgin Money M Account for Business
- Free day-to-day online business banking*
- Designed for businesses with a turnover of less than £1million
- Earn 0.25% Cashback on debit card purchases. Terms and exclusions apply
*excluding CHAPS and international payments
25 Products Compared
Get £100 cashback when you open a tide business bank account *
Tide Business Bank Account
Tide Business Bank Account
-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:Free for one year*
-
Overdraft:No
Great For:
- Apply online in minutes with no credit checks or paperwork needed
- This account comes with no monthly maintenance fees
To Consider:
- 20p per bank transfer after the first year
- Tide is a digital-only service. There are no physical branches for in-person banking or face-to-face support
Great For:
- Apply online in minutes with no credit checks or paperwork needed
- This account comes with no monthly maintenance fees
To Consider:
- 20p per bank transfer after the first year
- Tide is a digital-only service. There are no physical branches for in-person banking or face-to-face support
Features:
- Create and send invoices for free
- Multi-business – hold up to 5 business accounts
- Automated 30-day cash flow forecasts
Criteria:
- For registered business account: you must be registered with UK Companies House as a director of that company or partnership
- For sole trader account: you must be a UK based sole trader/freelancer
- For all accounts: you must be aged 18+, have a valid UK phone number and address, and hold compatible device registered to a UK App or Google Play store
*Complete the application and spend £1000 within 60 days of opening your account to receive £100 cashback from TIDE. Enter code BCA100 when you sign up. T&C apply. FSCS-Protected, Bank Account by ClearBank
Free day-to-day online business banking*
Virgin Money M Account for Business
Virgin Money M Account for Business-
Monthly Fee:Free
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Monthly Fee Offer:Ongoing
-
Bank Transfers:Free
-
Overdraft:Yes
Great For:
- Free online business banking (excluding CHAPS & international)
- Link up your business to market leading tools, such as Sage, Xero, Google, Shopify and more
To Consider:
- Must be based and operated in the UK (excluding Channel Islands, Isle of Man and Northern Ireland)
- All owners, directors, senior managers and account signatories must be over 18 years old
Great For:
- Free online business banking (excluding CHAPS & international)
- Link up your business to market leading tools, such as Sage, Xero, Google, Shopify and more
To Consider:
- Must be based and operated in the UK (excluding Channel Islands, Isle of Man and Northern Ireland)
- All owners, directors, senior managers and account signatories must be over 18 years old
Features:
- Free day-to-day online business banking (excluding CHAPS and international payments)
- Earn 0.25% Cashback on debit card purchases. Terms and exclusions apply
- Manage all your business data in one place using Virgin Money’s M-Track insights platform. Link up your business to market leading tools, such as Sage, Xero, Google, Shopify and more, to track them from one simple dashboard
Criteria:
- Available for eligible businesses with up to £1m annual turnover
- For limited companies, please allow up to 72 hours from registering your business with Companies House, before starting an application
*excluding CHAPS and international payments
Free Invoicing & Accounting Software. T&Cs Apply**
Lloyds Bank Business Account For Start Ups
Lloyds Bank Business Account For Start Ups-
Monthly Fee:£8.50
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Monthly Fee Offer:12 Months Fee Free
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Bank Transfers:100 electronic payments out free per month***
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Overdraft:Yes
Great For:
- Full access; online, via the app, phone, or at a branch.
- No monthly fee for 12 months if its your first Lloyds Business Account.
To Consider:
- £8.50 monthly fee after 12 months. Some transaction fees still apply.
- You must have a turnover of less than £25m.
Great For:
- Full access; online, via the app, phone, or at a branch.
- No monthly fee for 12 months if its your first Lloyds Business Account.
To Consider:
- £8.50 monthly fee after 12 months. Some transaction fees still apply.
- You must have a turnover of less than £25m.
Features:
- Digital banking with no account fee for 12 months*
- Free invoicing and accounting software available to business account holders. T&Cs Apply**
- Bank in whatever way suits your business – online, with our mobile app, over the phone or in branch
- Support from our UK-based relationship team
Criteria:
- To qualify for this account you need to be a sole trader, partner or company director
- You must have a turnover of less than £25m
- Must be 18 years old or over
- Must not already have a Lloyds Bank business account for this business
- Overdraft: Debit interest is charged monthly and monthly or annual fees will apply depending on your credit limit. Where you exceed your Overdraft limit, unauthorised interest and charges will apply
- All lending is subject to status. Security may be required. A guarantee may be required for Limited Companies and Limited Liability Partnerships
*After 12 months, there’s a monthly fee of £8.50. Some fees and transaction charges will apply as soon as the account is open. This offer only applies to the business’s first current account **You must be registered for Online for Business or Commercial Banking Online. UK based businesses only ***100 electronic payments out free per month, 20p thereafter
No monthly account fee and free UK digital banking*
HSBC UK Small Business Banking Account
HSBC UK Small Business Banking Account-
Monthly Fee:£0
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Monthly Fee Offer:None
-
Bank Transfers:Free*
-
Overdraft:Yes
Great For:
- No monthly account fee and free UK digital banking*
- Comprehensive features: A full range of business banking services.
To Consider:
- *Free UK digital banking means day-to-day standard electronic transfers made through Business Internet Banking and HSBC UK Business Banking app are free. Other charges apply e.g. cheques and CHAPS. See Business Price List for details. Subject to application, eligibility, credit check and T&Cs.
- **You must be an HSBC Business Banking customer to access free accounting tools through My Business Finance. Once you’ve opened your account, you’ll need to set up Business Internet Banking to get access. This is not available for HSBC Kinetic customers. T&Cs apply. Find out more here.
Great For:
- No monthly account fee and free UK digital banking*
- Comprehensive features: A full range of business banking services.
To Consider:
- *Free UK digital banking means day-to-day standard electronic transfers made through Business Internet Banking and HSBC UK Business Banking app are free. Other charges apply e.g. cheques and CHAPS. See Business Price List for details. Subject to application, eligibility, credit check and T&Cs.
- **You must be an HSBC Business Banking customer to access free accounting tools through My Business Finance. Once you’ve opened your account, you’ll need to set up Business Internet Banking to get access. This is not available for HSBC Kinetic customers. T&Cs apply. Find out more here.
Features:
- No monthly account fee and free UK digital banking*
- Free accounting tools to stay on top of invoices, cashflow and tax.**
- A full list of prices and charges applicable can be found in HSBC UK’s Business Price List at business.hsbc.uk/legal
Criteria:
- Sole traders, limited companies, partnerships, limited liability partnerships and non-charitable clubs/associations/societies can all apply
- Must be a tax resident in the UK but not the Channel Islands or the Isle of Man
- Available to Small Business Banking customers who are typically small enterprises with borrowing needs of up to £100k and whose everyday banking needs don’t need the support of a Relationship Manager. Please note, government lending schemes are subject to different limits.
- Borrowing is subject to application, eligibility, affordability and credit check. T&Cs, fees, charges and rates apply. For loans, you don’t need to open or maintain an HSBC Business Current Account unless a debenture or fixed charge over book and other debts is required.
*Free UK digital banking means day-to-day standard electronic transfers made through Business Internet Banking and HSBC UK Business Banking app are free. Other charges apply e.g. cheques and CHAPS. See Business Price List for details. Subject to application, eligibility, credit check and T&Cs.
Get £200 Cashback with a Tide business bank account and savings account*
Tide Savings Business Bank Account & Savings Account
Tide Savings Business Bank Account & Savings Account-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:Free for one year*
-
Overdraft:No
Great For:
- Apply online in minutes with no credit checks or paperwork needed
- This account comes with no monthly maintenance fees
To Consider:
- 20p per bank transfer after the first year
- Tide is a digital-only service. There are no physical branches for in-person banking or face-to-face support
Great For:
- Apply online in minutes with no credit checks or paperwork needed
- This account comes with no monthly maintenance fees
To Consider:
- 20p per bank transfer after the first year
- Tide is a digital-only service. There are no physical branches for in-person banking or face-to-face support
Features:
- Create and send invoices for free
- Multi-business – hold up to 5 business accounts
- Automated 30-day cash flow forecasts
Criteria:
- For registered business account: you must be registered with UK Companies House as a director of that company or partnership
- For sole trader account: you must be a UK based sole trader/freelancer
- For all accounts: you must be aged 18+, have a valid UK phone number and address, and hold compatible device registered to a UK App or Google Play store
*To be eligible for the £200 Cashback offer, open both a Tide Instant Saver and Tide Business Bank Account. Ts&Cs Apply. New customers receive up to 4% AER free for 6 months. For full offer T&Cs visit tide.co/savings. FSCS-Protected Bank Account by ClearBank.
£200 welcome bonus when you open a Revolut Business account*
Revolut Basic Business Account
Revolut Basic Business Account-
Monthly Fee:£10
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Monthly Fee Offer:None
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Bank Transfers:10 Free per month
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Overdraft:No
Great For:
- Multi-currency accounts, physical and virtual cards plus spend management tools
- Compatible with accounting software and create invoices in app
To Consider:
- Only 5 free local transfers and no free international transfers
- An e-money product with no branch access
Great For:
- Multi-currency accounts, physical and virtual cards plus spend management tools
- Compatible with accounting software and create invoices in app
To Consider:
- Only 5 free local transfers and no free international transfers
- An e-money product with no branch access
Features:
- Multi-currency accounts – receive payments and exchange in 25+ currencies
- Control and monitor team spending with multiple debit and virtual cards, manage permissions and levels of access and more
- Various payment facilities including Tap to Pay on iPhone (fees apply)
- International payments – Send and receive money from 150+ countries
Criteria:
- Available for limited companies, PLCs, LLPs, Partnerships & unlimited companies
- Currently available for companies registered in and with a physical presence within the European Economic Area (EEA), Switzerland, UK and US
Revolut is not a fully licensed bank in the UK. Your money is held in a safeguarded account with a regulated bank or high quality liquid assets. Your savings are deposited with partner banks and eligible deposits are protected up to £85k per bank. *Open a Revolut Business account and add money to your account by 31 August 2025 to receive a £200 welcome bonus. Available for new Revolut Business customers in the UK only. T&Cs apply. Additional fees may apply.
Join Airwallex and pay zero FX fees on your first £20,000*
Airwallex Explore Business Account
Airwallex Explore Business Account-
Monthly Fee:Free*
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Monthly Fee Offer:Ongoing
-
Bank Transfers:Free
-
Overdraft:No
Great For:
- Open local currency accounts in 60+ countries
- Make international transfers to 150+ countries at interbank rates
To Consider:
- Deposit £10,000 p/month or hold £10,000 to be free, if not £19 p/month
- An e-money product with no branch access
Great For:
- Open local currency accounts in 60+ countries
- Make international transfers to 150+ countries at interbank rates
To Consider:
- Deposit £10,000 p/month or hold £10,000 to be free, if not £19 p/month
- An e-money product with no branch access
Features:
- Open multiple accounts per entity. Collect and hold in 20+ currencies
- Expense management for cards and reimbursements
- Free local transfers to 120+ countries and domestic transfers. Access to interbank FX rates and batch transfers
- Multi-currency and employee cards with zero international fees
- Includes 5 free employee card users and up to 10 company cards
- Online card and local payment method acceptance globally
- Bank feeds sync with Xero. ApprovalMax, WorkflowMax by BlueRock Integrations
Criteria:
- You must be at least 18 years old
- Be a sole trader, partner in a partnership, or company
- Your business is registered in the UK. More markets are available with different Airwallex entities. Details can be found on the Airwallex website.
*Offer ends 31 August 2025. Terms & Conditions apply.
Get your first month of Pro or Team completely free*
Monzo Business Lite
Monzo Business Lite-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:Free
-
Overdraft:Yes
Great For:
- For sole traders and small businesses wanting a free, simple digital current account
- Get instant notifications for all account activity to stay in control of your cash flow
To Consider:
- Online account management only, no phone or branch access.
- Not currently available for charities or partnerships.
Great For:
- For sole traders and small businesses wanting a free, simple digital current account
- Get instant notifications for all account activity to stay in control of your cash flow
To Consider:
- Online account management only, no phone or branch access.
- Not currently available for charities or partnerships.
Features:
- Free, instant UK bank transfers
- 24/7 customer support
- Mobile and web access
- The Monzo banking essentials
Criteria:
- Only sole traders or limited company directors in the UK can apply.
*Your first month of Pro or Team is free, after that Pro is £9/month and Team starts from £25/month. Only sole traders or limited company directors in the UK can apply. Ts&Cs apply.
Equals Money Start Up Business Account-
Monthly Fee:£25*
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Monthly Fee Offer:None
-
Bank Transfers:Free
-
Overdraft:No
Great For:
- Simple onboarding with no credit checks, good for businesses without established credit history
- Ability to hold and transact in multiple currencies, useful even for start-ups with international clients or suppliers
To Consider:
- No overdrafts, loans, or credit facilities, which start-ups might eventually need as they grow
- An e-money account with no branch access
Great For:
- Simple onboarding with no credit checks, good for businesses without established credit history
- Ability to hold and transact in multiple currencies, useful even for start-ups with international clients or suppliers
To Consider:
- No overdrafts, loans, or credit facilities, which start-ups might eventually need as they grow
- An e-money account with no branch access
Features:
- Budgeting tools
- Manage multiple currencies
- Make tax preparation easy
Criteria:
- Available to Limited Companies, Sole Traders and Partnerships
- You must be 18+ and a UK resident.
Business expense and corporate financial management account
Wallester Business Expense Account
Wallester Business Expense Account-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:No
-
Overdraft:No
Great For:
- Streamlining company spending with virtual and physical cards, automation, and a real-time dashboard for complete expense control
- Open accounts and issue cards quickly without visiting a bank
To Consider:
- Wallester is not a business bank account, you don’t get traditional banking features like transfers, overdrafts or loans.
- Wallester is a business expense and corporate financial management account
Great For:
- Streamlining company spending with virtual and physical cards, automation, and a real-time dashboard for complete expense control
- Open accounts and issue cards quickly without visiting a bank
To Consider:
- Wallester is not a business bank account, you don’t get traditional banking features like transfers, overdrafts or loans.
- Wallester is a business expense and corporate financial management account
Features:
- Free package with 300 free virtual cards and an unlimited number of free physical cards
- Free multifunctional dashboard for tracking and managing expenses
- No top-up fee (in EUR), no transaction fees, no usage fee, no issuance fee, and no fee for adding extra users
- Ten currencies, including GBP, EUR, USD and other European currencies (SEK, NOK, CZK, HUF, RON, PLN, DKK)
- App included and API for integrations with any CRM accounting software
Criteria:
- You must be at least 18 years old
- Be a sole trader, partner in a partnership, or company
- Must have an eligible business bank account
Free package of 300 virtual cards with zero fees or limitations
Apply for an overdraft at the Application Stage
Zempler Bank Business Account
Zempler Bank Business Account-
Monthly Fee:Free
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Monthly Fee Offer:Ongoing
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Bank Transfers:3 free per month
-
Overdraft:Yes
Great For:
- There are no credit checks to open an account
- Great bank account for Sole Traders & new Ltd Companies, as no monthly or annual fees on the account
To Consider:
- 0.55% fee to pay in cash at the Post Office (£4 min fee)
- FX transaction fee of 2.99% on non-sterling transactions
Great For:
- There are no credit checks to open an account
- Great bank account for Sole Traders & new Ltd Companies, as no monthly or annual fees on the account
To Consider:
- 0.55% fee to pay in cash at the Post Office (£4 min fee)
- FX transaction fee of 2.99% on non-sterling transactions
Features:
- 24/7 app & online servicing and UK based customer service team
- FSCS protection – up to £85,000
- Deposit cash into any of the UK’s 11,500 Post Offices.
- Invoicing tools that allow you to create and send invoices easily
Criteria:
- Available to UK registered companies or UK-based sole traders
- Application made by UK Director
- UK Director 18+ years old
12 months fee free and interest earned on every penny – up to 3.50% AER variable*
Cynergy Bank Business Current Account
Cynergy Bank Business Current Account-
Monthly Fee:£5*
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Monthly Fee Offer:12 months free
-
Bank Transfers:Free
-
Overdraft:No
Great For:
- International payments in 7 major currencies, including EUR and USD
- Online application for businesses with up to 10 directors
To Consider:
- 3.50% on balances up to £10k but 0.10% for balances above £10k*
- Fees apply for cash, CHAPS, SWIFT and SEPA transactions
Great For:
- International payments in 7 major currencies, including EUR and USD
- Online application for businesses with up to 10 directors
To Consider:
- 3.50% on balances up to £10k but 0.10% for balances above £10k*
- Fees apply for cash, CHAPS, SWIFT and SEPA transactions
Features:
- 3.50% on balances up to £10k and 0.10% for balances above £10k*
- Make international payments in up to seven major currencies, with option to open EUR or USD accounts.
- Customise workflows for account management and transaction approvals requiring more than one account user to sign-off.
- Bulk payment processing.
- Online application for businesses with up to 10 directors.
Criteria:
- Must be a partnership, limited liability partnership (LLP) or limited company (LTD)
- Must be registered and eligible to pay tax in the UK
- Have a maximum of 10 directors
*The £5 monthly fee is waived for 12 months for new Business Current Account openings. The offer is available for a limited time only. Cynergy Bank reserves the right to withdraw the offer at any time. T&Cs apply.
The Co-operative Business Bank Account-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:Free
-
Overdraft:Yes
Great For:
- Ideal for start ups and growing businesses who bank digitally
- No charges for all automated credits, cash withdrawals and debit card purchases
To Consider:
- Charges apply for cash and cheque transactions
- An overdraft arrangement fee applies and where security is required, additional security fees may apply
Great For:
- Ideal for start ups and growing businesses who bank digitally
- No charges for all automated credits, cash withdrawals and debit card purchases
To Consider:
- Charges apply for cash and cheque transactions
- An overdraft arrangement fee applies and where security is required, additional security fees may apply
Features:
- Free everyday digital business banking. No monthly fee. No charges for all automated credits, cash withdrawals and debit card purchases
- Integrate your accountancy software like Xero, Sage or Quickbooks within your online banking
- Online and in-person banking including mobile, instant secure messaging, UK based contact centre, and in branch. Rated ‘Excellent’ based on over 12,000 reviews on Trustpilot
- Most receive their account details within five days
- Co-operative Bank business customers get free, unlimited access to the Go Get Paid app – the fast, simple, secure way to get paid. Plus access selected Clover payment terminals for £1 a month for the first 12 months (fees apply)
- The original ethical bank with a customer-led Ethical Policy
Criteria:
- Must be a UK resident with a business address in the UK
- Must be 18 or over
- You or your organisation must be one of the following: “a Sole Trader, Partnership, Limited Liability Partnership or Limited Company
Charges apply for cash and cheque transactions and other special services e.g. foreign and CHAPS payments. You can deposit cash in branch and in the Post Office for £1.50 per cheque or £1.50 per £100 of cash deposited. An overdraft arrangement fee applies and where security is required, additional security fees may apply. Application subject to status (including credit checks and an assessment of your financial circumstances), eligibility and T&Cs. Mobile banking is subject to eligibility.
Make and Receive International Payments
Card One Money Business Account
Card One Money Business Account-
Monthly Fee:£12.50
-
Monthly Fee Offer:None
-
Bank Transfers:From 30p
-
Overdraft:No
Great For:
- No credit checks or signatures required
- Supports integration with platforms like Xero, Sage, and FreeAgent
To Consider:
- One-off £55 application fee which is refundable if the application is unsuccessful
- £12.50 per month with no free monthly period
Great For:
- No credit checks or signatures required
- Supports integration with platforms like Xero, Sage, and FreeAgent
To Consider:
- One-off £55 application fee which is refundable if the application is unsuccessful
- £12.50 per month with no free monthly period
Features:
- Up to 4 additional cards for business use
- UK-based customer support
- International payments in a range of currencies
Criteria:
- Available to Limited Companies, Sole Traders and Partnerships
- Your business must be registered in the UK and have an annual turnover of less than £2m
- You must be 18+ and a UK resident. Card One Money need to be able to verify your identity & residency.
- Card One Money is not covered by the Financial Services Compensation Scheme. See product FAQs for more info
Open an account on the same day you apply with no credit checks.
Wide Range of Expense Managements Tools
Anna Money Pay As You Go
Anna Money Pay As You Go-
Monthly Fee:Free
-
Monthly Fee Offer:Ongoing
-
Bank Transfers:From 20p
-
Overdraft:No
Great For:
- Obtain a UK business account and sort code in 3 mins with ID
- One free debit card included (£3 per extra card)
To Consider:
- No joint account access
- An e-money product with no branch access
Great For:
- Obtain a UK business account and sort code in 3 mins with ID
- One free debit card included (£3 per extra card)
To Consider:
- No joint account access
- An e-money product with no branch access
Features:
- 1 debit card included (£3 per extra card) – 1% cashback on selected categories
- Personal payment link for accepting payments online (1% commission)
- Instant invoice generator and savings pots facility (fees apply)
- Landlords / property investors get a free 12 month subscription to the National Residential Landlords Association (NRLA)
- FastTrack to Credit – Boost your credit score and get access to credit after 3 months activity
Criteria:
- Must be a Sole Trader, Director of a Limited Company (and listed on Companies House), or a Partner in a Limited Liability Partnership
- Business must be located within the UK and you also need to have a UK residential address
- Not available to charities
ANNA Business comes with invoice generator tools, HMRC recognised Tax calculator and filing. Automate your bookkeeping with ANNA.
Get Your First 3 Months Free + Free Accounting Software
Counting Up Business Current Account
Counting Up Business Current Account-
Monthly Fee:£3
-
Monthly Fee Offer:3 months free
-
Bank Transfers:30p
-
Overdraft:No
Great For:
- Perfect for start-ups: Pay a low monthly fee depending on how much your business earns
- Automated taxes calculates what you owe in real time
To Consider:
- The price increases with account usage
- An e-money product with no branch access
Great For:
- Perfect for start-ups: Pay a low monthly fee depending on how much your business earns
- Automated taxes calculates what you owe in real time
To Consider:
- The price increases with account usage
- An e-money product with no branch access
Features:
- Monthly subscription fees that go up and down in line with your business performance
- Rated ‘Excellent’ based on over 2,000 reviews on Trustpilot
- Built-in accounting software with receipt capture and live business insights
Criteria:
- Available to sole traders and limited companies
- You must be 18+ and a UK resident
Pay no subscription fees during your trial. Other transaction charges may apply.
How to Compare Business Bank Accounts
Understand Your Requirements
How you do business will affect the type of account you need. How many transactions will you have each month? Do you need to pay in cash? Do you need a local branch?
Check Eligibility
Most providers have a range of business accounts to suit different types of businesses. Check the eligibility of each account to make sure if suited to your business.
Compare The Latest Deals
There are numerous offers and deals to attract new customers which can be compared with our handy tool above. Always consider the cost of the account once the free period ends.
Why a Sole Trader Should Use a Business Bank Account
As a sole trader, you are the business. Legally, your personal and business finances are one and the same. This means you aren’t required by law to open a separate business bank account. It can be tempting to simply use your personal current account to manage all your transactions, especially when you’re just starting out. However, this approach can quickly bring complications.
Using a dedicated business bank account is one of the most effective first steps you can take to establish good financial habits. It creates a clear separation between your business income and expenditure and your personal spending. While most UK banks won’t forbid you from receiving some business-related payments into a personal account, many have terms and conditions that prohibit its use as a primary business account. Opening a specific account for your sole trader business is the recommended best practice for clarity, professionalism, and easier financial management.
The Benefits of a Separate Account
Even without a legal obligation, the practical advantages of a business bank account for a sole trader are significant.
Simplified Tax and Financial Management
This is the most compelling reason. When it comes to filing your annual Self-Assessment tax return with HMRC, having all your business transactions in one place is a huge advantage. You won’t have to spend hours trawling through personal statements trying to isolate business expenses from your weekly shop or personal bills. This clarity drastically reduces the risk of making errors, ensures you claim for every allowable expense, and makes the entire process faster and less stressful. Transactions can be categorised instantly, creating speedier and efficient tax returns.
Enhanced Professionalism
Presenting clients with business account details for payment instantly enhances your credibility. It shows that you are organised and serious about your venture. It allows you to move away from just using your personal name as your business identity.
Access to Business-Specific Tools
Business accounts often come with features designed to make a sole trader’s life easier. This can include integration with accounting software like QuickBooks or Xero, tools for creating and sending invoices directly from your banking app, and easy ways to categorise your spending to see where your money is going.
Preparing for Growth
If you have ambitions to grow your business, perhaps by taking on staff or eventually incorporating as a limited company, starting with a separate business account establishes the financial discipline you’ll need in the long term. It also begins to build a financial history for your business, which can be important if you later need to apply for credit or seek investment.
How to Open a Sole Trader Account
Opening a business bank account as a sole trader is usually a quick and simple process. You won’t need any registration documents from Companies House. The bank will typically ask for:
- Proof of Identity: A valid passport or UK driving licence.
- Proof of Address: A recent utility bill, council tax statement, or bank statement (usually from the last three months).
- Business Details: Your business name (if you use one different to your own name), what your business does, and an estimate of your annual turnover.
Many applications can be completed online or via a smartphone app in minutes. If you apply to a traditional high street bank, the process can be longer due to the larger range of services potentially available to you.
Choosing the Right Account
- Fees: Many offer accounts with no monthly fee or introductory fee-free periods. Look at charges for things you’ll use, like bank transfers or cash deposits to work out real costs.
- Cash Handling: If you deal with a lot of cash, check the bank’s policy and fees for depositing it, as this can be a limitation for some types of business accounts.
- Software Integration: If you use or plan to use accounting software, ensure the account can connect to it automatically to save you time or find one that offers accounting software within the package that either connects to your accountants, or as part of the HMRC’s initiative of ‘Making Tax Digital’.
Sole Trader Business Bank Account FAQs
1. As a sole trader, am I legally required to have a business bank account?
No, in the UK, sole traders are not legally obligated to have a separate business bank account because the business is not a separate legal entity from the owner. However, it is strongly recommended for financial clarity and you will have to present your tax returns with your business income and expenditure separated from personal.
2. Can my bank close my personal account if I use it for business?
Yes, they can. Some personal bank accounts have terms and conditions that state they should not be used for business purposes or limits business transactions. If the bank sees a higher volume of transactions that look like business activity, they may insist you to open a business account or risk losing your personal account.
3. Will a sole trader business account affect my personal credit score?
When you apply for a business account as a sole trader, the bank will almost certainly look at your personal credit history as part of their checks. This is because, as a sole trader, you are personally liable for any business debts. Managing the account well is unlikely to harm your score, but if you go overdrawn without permission, it could have an impact.
4. Are there completely free business bank accounts for sole traders?
Many providers offer business accounts with no monthly maintenance fees. These are often ideal for sole traders. It’s still important to check the costs for specific types of account activity, such as transaction volume, international payments or depositing cash which usually come with a separate charging structure to the monthly cost.
5. How is a sole trader account different from a limited company account?
The main difference is in the setup and legal standing. A sole trader account is linked to you as an individual. A limited company account is in the name of the company itself, as it is a separate legal entity. Opening a limited company account requires you to provide your Companies House registration details, which is not needed for a sole trader account.