UK business bank accounts are dedicated accounts used by businesses to manage finances, including transactions, expenses, and revenue, separate from personal accounts. If you are planning to expand and grow your business, you need a business bank account.
Compare UK Business Bank Accounts
The below comparison table compares the key features of business bank accounts in the UK like monthly fees, how much they cost per transaction and who they are most appropriate for.
| Business Bank Account | Monthly Fee | Free Transactions | Ideal For |
|---|---|---|---|
| Tide | £0 | 5 free transfers/month | Startups, digital-only banking |
| Starling Bank | £0 | Unlimited | SMEs, freelancers |
| HSBC Kinetic | £0 for 12 months, then £6.50 | Unlimited | Sole traders, small businesses |
| Lloyds Bank | £0 for 12 months, then £8.50 | Free electronic payments | Small businesses, startups |
| Revolut | £0 | 5 free transfers/month | International trade, tech-savvy users |
| Natwest | £0 for 24 months | Free transactions for 24 months | Startups, SMEs |
| Mettle | £0 | Unlimited | Digital-first businesses |
| Monese | £9.95 | Free UK transfers | Mobile-first users, international payments |
| Virgin Money | £0 | Unlimited | Businesses with turnover < £1m |
| Barclays | £0-£6 | Free transactions based on plan | Various business sizes |
When comparing UK business bank accounts you should take into consideration the below:
- Fees and Charges: Even “free” accounts may have charges for specific services like cash deposits or international transfers. Check the fee structure to avoid surprises.
- Transaction Limits: Some accounts have limits on the number of free transactions per month. Ensure these limits align with your business needs.
- Customer Support: Choose a bank with reliable customer support, available through your preferred communication channels.
- Account Features: Look for features such as integration with accounting software, expense management tools, and mobile banking capabilities. These can save time and streamline your financial management.
Which bank account is free for business accounts?
Several UK banks offer free business accounts with various features tailored to different business needs:
- Starling Bank offers a free business account with no monthly fees, free UK bank transfers, and free ATM withdrawals abroad. It also integrates with accounting software and provides 24/7 customer support​.
- Mettle, backed by NatWest, provides a fee-free account for sole traders and limited companies. It includes free UK transfers, in-app invoicing, and cash deposits at the Post Office or PayPoint​.
- Tide offers a basic free account with automated expense management and invoicing tools, though advanced features require additional charges. It’s suitable for startups and freelancers​.
- Monzo Business Lite has no monthly fees and offers free UK bank transfers, real-time notifications, and 24/7 customer support via a mobile app.
- HSBC Kinetic provides a free account for the first 12 months, with app-based management, aimed at sole traders and single director businesses​.
- Virgin Money M Account for Business includes free everyday online banking, free UK bank transfers up to £30,000, and cashback on card spend​.
- Revolut Business supports multiple currencies and offers no-fee card payments and expense management tools for its basic account​.
How to open a business bank account in the UK
- Compare UK Business Bank Accounts: Research different banks and their business account offerings. Consider factors such as fees, features, customer support, and integration with accounting software. Popular options include Starling Bank, Mettle, and HSBC Kinetic, which offer free business accounts with varying benefits​.
- Prepare the Required Documents:Â Gather the necessary documents to verify your business and personal identity. Typically, you will need, Proof of Identity, Proof of Address, Business Details and financial information like business plans.
- Apply Online: Opening a business bank account is harder than personal accounts, but the process can still be done online. It can take from a few days to a few weeks, depending on the bank and your business type​. For instance, businesses that are owned by companies instead of individuals will take longer to open.
Do you need to open a business bank account to run a company in the UK?
Generally, yes, you do need a business bank account to run a company successfully in the UK; however, there are some instances where you don’t. For example if you are running a cash business or take payments in cryptocurrency. However, even though a business bank account is legally necessary for limited companies and partnerships, sole traders, there are many advantages to having one, like professionalism, financial management, and access to business loans and company credit cards.
Also, if you run a limited company or a partnership, having a business bank account is generally a legal requirement. This is because the business is a separate legal entity, and its finances must be kept separate from your personal finances. But if you are a sole trader, you are not legally required to have a business bank account for a separate legal entity.
How do you switch bank accounts?
The Current Account Switch Guarantee, which simplifies the process of switching bank accounts is designed for personal current accounts and small business accounts with a turnover of less than £6.5 million and fewer than 50 employees​. So if your business qualifies, using the switching service is the easiest way to automatically switch bank accounts, and includes:
- Seven-Day Switch: Your new bank will switch your account within seven working days.
- Automatic Transfer: All your incoming and outgoing payments (such as direct debits and standing orders) will be automatically transferred to your new account.
- Redirection Service: Any payments sent to your old account will be automatically redirected to your new account for 36 months.
- Guarantee: If anything goes wrong during the switch, the new bank will cover any interest or charges incurred due to the error.
For businesses that do not qualify under these criteria, you will need to manually switch your account by following the standard process of opening a new account and transferring your funds and payment instructions.
Are there any UK business bank accounts that don’t perform a credit check during the application?
Yes, there are several UK business bank accounts like Tide, Cashplus, ANNA Money, Monzo and Mettle that typically do not perform credit checks during the application process.
These are often digital banks or fintech companies focused on providing accessible banking services for startups, freelancers, and small businesses.Â
But, even though these business bank accounts do not do credit checks, they will still perform ID checks on the directors and owners of the company that is applying.
Bank accounts that do not perform credit checks are handy for those business owners with a poor credit rating, where you will not be looking to borrow funds from your bank for your business.
Which business bank account is best for overdrafts?
HSBC will offer the biggest overdraft based on up to 25 per cent of a business’s turnover. Where as Santandar has the most conservative overdraft limits at 10% of turnover.
- HSBC – Up to 25% – Subject to credit assessment and other financial criteria.
- Barclays – Up to 15% – Dependent on credit approval and business financial status.
- NatWest – Up to 10% – Varies with financial assessment and credit check.
- Lloyds Bank – Up to 25% – Requires credit check and tailored to business needs.
- Santander – Up to 10% – Subject to status and credit approval.
- Starling Bank – Varies based on assessment – Limits can go up to £150,000 based on creditworthiness.