Self-Employment Business Bank Account Guide UK — Best Options for Small Businesses Do you need a business bank account? How to choose one, what features matter, fees to watch for, and comparisons of UK business bank accounts for sole traders and limited companies.
10 November 2025
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3 min read
A dedicated business bank account keeps your finances organised, simplifies accounting, and presents a professional image. For limited companies it is mandatory; for sole traders it is strongly recommended.
Do You Need One? Business Type Required? Recommended? Limited company Yes (legally required)Essential Sole trader No Strongly recommended Partnership No Strongly recommended Freelancer No (unless Ltd) Strongly recommended
Types of Business Bank Account Type Best For Monthly Fee Digital/app-based (Starling, Tide, Mettle)Sole traders, freelancers, small Ltd companies Free–£10/month Traditional high street (Barclays, NatWest, HSBC, Lloyds)Businesses needing branch access, cash handling Free (intro) then £5–£15/month Challenger banks (Monzo Business, Revolut Business)Tech-savvy businesses, international payments Free–£25/month
Feature Comparison Free/Low-Cost Digital Accounts Feature Starling Tide Mettle Monzo Business Monthly fee Free Free (basic) Free Free (Lite) UK transfers Free Free Free Free Direct Debits Free Free Free Free Cash deposits Free (at Post Office) £1/per deposit No Fee applies Integration with accounting software Xero, FreeAgent, QuickBooks Xero, QuickBooks, Sage FreeAgent Xero, FreeAgent, QuickBooks Invoicing No Yes (built-in) No Yes (paid plans) Multi-currency Via Wise integration No No Yes (paid plans) Overdraft Available No No No
Traditional Bank Accounts Feature Barclays NatWest HSBC Lloyds Free banking period 12 months 12 months 18 months 12 months Monthly fee (after) £8–£12/month £5–£10/month £8–£12/month £7–£10/month Branch access Yes Yes Yes Yes Cash deposits Yes (fee may apply) Yes (fee may apply) Yes (fee may apply) Yes (fee may apply) Overdraft Yes Yes Yes Yes Dedicated business manager Depends on turnover Depends on turnover Depends on turnover Depends on turnover
What to Look For Feature Why It Matters Monthly fees Ongoing cost — compare carefully Transaction fees Per-transaction charges add up Cash deposit facilities Essential for cash-handling businesses Accounting integration Saves time on bookkeeping Invoicing Built-in invoicing saves on additional software International payments If you have overseas clients or suppliers Overdraft/credit Emergency funding access Customer support In-app chat, phone, branch? Card controls Freeze/unfreeze, spending limits Multi-user access If you have a business partner or bookkeeper
Fees to Watch Fee Type Typical Range Monthly account fee £0–£15/month Cash deposits 50p–£1 per deposit or % of amount Cash withdrawals Free–70p per withdrawal CHAPS payments £15–£30 per payment International transfers £5–£25 + exchange rate margin Returned Direct Debit £5–£15 Overdraft interest 10–20% EAR
Opening a Business Bank Account What You Need Document Sole Trader Limited Company Photo ID Yes Yes (all directors) Proof of address Yes Yes (all directors) Company registration number N/A Yes Memorandum of Association N/A Yes Business details (type, projected income) Yes Yes UTR number Helpful Helpful
How Long It Takes Bank Type Typical Setup Time Digital banks Minutes to hours Traditional banks 1–4 weeks With appointment Same day to 1 week
Best Account by Situation Situation Recommended Freelancer — just starting Starling or Mettle (free, simple) Sole trader — cash-handling business Traditional bank (branch + Post Office access) Limited company — tech/services Starling or Tide (free + invoicing) International clients Wise Business or Revolut Business Growing business needing credit Traditional bank (overdraft, loans) Multiple team members Monzo Business Pro or Revolut
Tips Open early — do it when you register , not afterKeep business and personal separate — alwaysConnect to accounting software — automates bookkeepingReview annually — better deals may appearUse free introductory periods — switch after if fees startSet aside tax — use pots or separate savings to hold tax fundsFor managing business finances, see our invoicing guide and accounting software guide .