33 min read30 August 2019
Picking the right business bank account can take lots of time, energy and effort. So, we decided to do the hard work for you. Here's our guide to the best available in the UK – plus everything you need to know about how they work.30 August 2019
So you’ve started your own business, what’s next? Well, aside from letting HMRC know about your business, and registering it with them, you should apply for a business bank account. This will help you keep your business finances separate from the money in your personal current account, track your cash flow effectively and plan for the the future.
To help you decide which banking service to go for, we've compared all of the major providers – from the high street banks to the online newcomers – and highlighted their key features.
So, to help make your decision pain free, here’s everything you need to know about opening a business bank account, plus a handy comparison of the top UK accounts for 2020.
To find the best business bank account providers in the UK, please skip to Part 2.
Put simply, a business bank account is a place where you store all your company's finances and track what's coming in and out. While it's not a legal requirement to open a business bank account for a limited company, it is necessary to separate business and personal finances.
To understand whether or not you need a business bank account, it’s worth setting the facts straight about what a business bank is and how it differs to a personal bank account.
Opening a specialist business bank account would make your life – as well as that of your accountant’s – much easier. It also makes you look more professional to clients, which encourages trust and repeat business.
The bank account for your company needs to be in the name of your business, and banks will realise if you’re attempting to set up a personal account in the name of a limited company and force you to switch to a business account, which comes with its own terms and conditions.
Most business accounts will charge you a monthly fee to use. These are usually fairly low, but accounts with more tools and features may cost more, so it's a good idea to understand what you're paying for up front. You'll usually be able to get several debit cards with the account, to enable you and any staff the ability to use the card. Many business accounts also now have their own dedicated app, which can help you track spending, pay bills and generally manage your money. Some business accounts even offer insurance and support in the case of fraudulent activity.
Opening a business bank account in the UK is a pretty simple process – if you make sure you've got all the documents in one place before you apply. You'll likely need some, if not all, of the following:
A proof of your ID It's possible to use one of three official documents. Your driver's license photo card, your passport, or an official ID card.
A proof of your address For this you can use things like a gas or electricity bill, a council tax bill or a statement from your personal bank account.
Information about your business:
Before the bank sets you up with your account and sends you out your debit cards, you may be asked to supply some details about your personal accounts and credit score. This is help the banking provider know more about how you use money, and will help them gauge how you might manage your business banking.
It's impossible to say which best bank offers the best small business account, as every business is unique and the services offered by each provider varies widely. However, in the section below we've tried to help you decide by comparing the products and services offered by each of the business accounts.
Whether you can choose to use a personal bank account for your business depends on the type of business you run or own. Limited (ltd) companies legally need a separate account, which should be a specific business account if possible.
This is because the company is deemed to be a legally distinct and separate from you. If you're a sole trader then you're under no obligation to set up independent accounts. That said, it is a good idea to have one current account for personal banking and one for the business. This will help you keep your business cashflow apart from your own.
You do not legally need to have a business bank account if you're a sole trader – but it is a good idea. If you run a limited company then yes, you do need a specific business bank account, with separate cards and statements.
One of things most business owners look for in a business banking service is lower costs – and many banks offer day-to-day banking for the first 12 to 18 months without charging any fees. However, there are still likely to be certain transaction fees, and once the honeymoon period is over transaction fees can increase significantly. So, it’s worth checking how much these fees will cost your business in the long-term. You can also switch to a new account once the fees start to stack up.
One way of calculating the long-terms costs of your bank account is by analysing how you usually pay for expenses and how you usually get paid. Some accounts have different tariffs which better accommodate cash or cheque transactions, while some services better support who receive and make payments online. There are even banks which focus on offering lower transaction fees for making and receiving payment abroad.
Another consideration for your business is how much you rely on or prefer to use mobile apps, in-branch support, or telephone and online services. Many businesses owners would be happy to use online methods only if the mobile-app worked well – so it’s worth reading reviews on apps and how they integrate to other services, including contactless cards, support methods, pensions, accounting software, invoicing and more.
It’s also worth factoring in how your business could benefit from the business account even further: does it offer free tools or guides, and can you earn cashback on your purchases or interest on your balance?
For those worried about credit checks, there are accounts that don’t do them – although these providers will do other types of checks on identity. Meanwhile, while some of the challenger providers may have some great functionality with their mobile apps but your money may not be protected by the FSCS if they were to go bust.
Small businesses all have different needs, but for those enterprises or sole traders just starting up, there will be a need for accounts offering lower fees – even if this is just for a set period of service.
After that, there may be a need for banking tools that can help manage the business – accounting software, pensions, receipts and smart invoicing can help to increase your efficiency and be less reliant on others.
If you’d like to find out how a credit facility or business loan could help you manage the cash flow of your business bank account, why not get in touch using the contact details above? Alternatively, you can click the blue Intercom button on the bottom right of your screen. To find out more about the best business banking providers in the UK, keep reading.
Use the table below to navigate, or simply scroll down to discover the best 25 business bank accounts in the UK. Banks are ranked by Trustpilot score.
|Bank||Trustpilot score||Fees||Additional charges?|
|Fair Everywhere||4.7||£50 a month||yes|
|Counting Up||4.6||Between £0 to £4.95 a month||yes|
|Coconut||4.6||Between £0 to £5 a month||yes|
|Revolut||4.5||Between £0 to £1,000 a month||yes|
|Anna||4.3||Free for 3 months then charges between £5 and £11||no|
|Metro Bank||3.9||Between £0 to £5 a month||yes|
|Cashplus||3.5||£5.75 a month, or £69 annually||yes|
|Allied Irish Bank||2.8||£10 per quarter||yes|
|The Co-operative Bank||2.2||£5 a month (free for 30 months)||yes|
|Card One Banking||1.9||Minimum of £12.50 a month||yes|
|Clydesdale Bank||1.7||£6.50 a month (25 months free for new businesses or those switching to the bank)||yes|
|Lloyds Bank||1.7||£6.50 a month (18 months free for new businesses)||yes|
|Barclays||1.6||£6 a month||yes|
|Bank of Scotland||1.6||Free for 18 months then £6.50 a month||yes|
|NatWest||1.5||Between £0 to £5 a month (free for start-ups for 18 months)||yes|
|HSBC||1.5||Free for 12 months then £5.50 a month||yes|
|Yorkshire Bank||1.5||£6.50 a month (25 months free for new businesses or those switching to the bank)||yes|
|Santander||1.5||£7.50 a month (free for start-ups for 18 months)||yes|
|Royal Bank of Scotland||1.4||Between £0 to £5 a month (free for start-ups for 24 months)||yes|
|TSB||1.3||Between £0 to £5 a month (free for 25 months)||yes|
|Ulster Bank||1.2||£8 per quarter (free for start-ups for 18 months)||yes|
|Bank of Ireland UK||1.2||£25 per quarter||yes|
Every care has been taken to provide accurate info on each business bank account provider. All facts and stats are correct (according to the bank account providers' websites) as of 1st September 2020.
Trustpilot score: 4.7/5 (9,233 customer reviews)
Monthly fees: £50
Fair Everywhere is a good option for small and medium-sized businesses that buy and sell in foreign markets. Its platform lets users make and receive payments all over the world in local currencies and at competitive rates. Fair Everywhere is another relative newcomer, with a service that's mainly accessed online on through its app, however its support team are available to phone during business hours.
Trustpilot score: 4.6/5 (671 customer reviews)
Monthly fees: Free for starters (£750 of incoming funds per month), £2.95 for standard account holders (£750-£1,750 incoming funds per month) and £4.95 for premium account holders (more than £1,750 of incoming funds per month).
Like Coconut, Counting Up seeks to attract customers by consolidating small business owners' banking and accounting needs into one service. Aimed at making things as simple and jargon free as possible, Counting Up may be a good option for those new to running a business. There are three tiers of membership, from free to £9.95 a month. Users access their accounts mainly through the Counting Up app and online portal.
Trustpilot score: 4.6/5 (278 customer reviews)
Monthly fees: Free options for side businesses, or sole traders starting up and £5 per month excluding VAT for full-time businesses and full-time sole traders who opt for the Grow plan
Coconut is a financial tool that's aimed freelancers, small business directors and the self-employed that seeks to make managing finances – particularly tax returns, expenses, documenting paid and unpaid invoices, and tracking expenses – easier using smart tech interfaces. Low fees and two business account options (Start and Grow), make Coconut attractive for smaller enterprises looking to capitalise on its wide range of services.
Trustpilot score: 4.5/5 (6,189 customer reviews)
Monthly fees: Free
At first glance Starling's business offering is compelling – zero monthly fees and zero fees on domestic transactions. Aimed at owners of limited companies and the self-employed, Starling offers oferdraft facilities and plenty of business planning and accountancy tools.
Trustpilot score: 4.5/5 (23,290 customer reviews)
Revolut is a flexible option for business owners across Europe. It's likely to be particularly useful for businesses with operations that span multiple countries, as it lets users hold, send, and receive funds in up to 28 currencies. There are several account options – including Freelancer or Company – each tailored for a different scale of business. The more expensive generally come with more free transactions per month and with the ability to issue additional cards among employees.
Trustpilot score: 4.3/5 (76 customer reviews)
Monthly fees: Free for three months, then £5 for sole traders, £5 for limited companies with a turnover of £2,000. £11 per month for limited companies with a turnover over £2,000.
If you don’t use your account, as a limited company or sole trader the monthly fee is waived.
Other fees: No extra fees for UK ATM withdrawals, transfers or card payments.
ANNA stands for Absolutely No Nonsense Admin. As the name suggests, the company positions itself as platform to help sole traders and limited companies with time-consuming administrative tasks, such as chasing invoices. It also provides those with a fluctuating income the ability to pay nothing if they have not used its services for a month. ANNA is not a bank and therefore does not have in-branch services of any kind.
Trustpilot score: 4.1/5 (1,854 customer reviews)
Monthly fees: Free
Tide enjoys a 8/10 score on TrustPilot. Because it’s not a high street bank, Tide users manage their account and access its services through the app. Designed for small businesses, freelancers, sole traders and established enterprises, business owners can account for free, and get a contactless MasterCard plus up to 35 team cards for employees. Iwoca is fully integrated into Tide, meaning its customers can apply to iwoca for business funding and get a decision without leaving the app.
Trustpilot score: 3.9/5 (1,500 customer reviews)
Monthly fees: Zero if balance is over £5,000, otherwise £5
Metro Bank has faced criticism after miscalculating the risk level of some of its commercial loans by £1bn. However, the UK challenger bank’s customers are still satisfied with the service they’re receiving. Metro had the highest number of business customers satisfied with services in branches and business services (77%), according to the Competitions and Markets Authority’s independent survey in August 2019.
Trustpilot score: 3.5/5 (3,080 customer reviews)
Monthly fee: £5.75 a month, or £69 annually
Cashplus is another banking services provider that's not actually a bank. Mainly accessed through its online app, users can add on pre-approved credit products to get their cash-flow moving, or track expenses asd they happen.
Trustpilot score: 3.1/5 (30 customer reviews)
Monthly fees: NA
Handelsbanken is a Swedish bank which has been operating in the UK for nearly four decades. Its website is not clear around its banking service pricing, but customers of the bank are clearly pleased. In 2019, Handelsbanken received top scores for customer service and satisfaction, according to the independent Competition and Markets Authority report into 14 business banks.
Trustpilot score: 2.8/5 (20 customer reviews)
Monthly Fees: £10 per quarter
Allied Irish Bank, or AIB, positions itself as relationship-driven bank for medium and large businesses, such as hotels, small restaurant chains and hotels. Its monthly and transaction costs are fairly low but there's no mention of a fee-free period at sign up.
Trustpilot score: 2.2/5 (613 customer reviews)
Monthly fees: Free for 30 months, but credit balance has to be above £1,000 otherwise a £5 fee. £5 fee thereafter regardless of credit balance.
The Co-operative Bank offers an ethical option for business banking. While it has no dedicated high street offering, much like other newcomers, users can access services through the network of Post Offices around the UK. Businesses with cash in the bank can benefit from up to 30 months of fee-free banking.
Trustpilot score: 1.9/5 (33 customer reviews)
Monthly fee: Minimum of £12.50, plus one-off application fee of £55 which is refundable if not approved, under terms and conditions
Other fees: Electronic payment fee: £0.30 each Cash or cheque credit: 0.75%, minimum of £0.50
Card One's Business Account is designed specifically for small businesses. The online-only current account is easy to use and can be secured even if the business owner has a less than perfect credit history.
Trustpilot score: 1.7/5 (41 customer reviews)
Monthly fees: 25 months free for new businesses or those switching to the bank, otherwise £6.50
Clydesdale offers two types of accounts, the first is for either those established small businesses that want to switch bank providers, or those start-ups that have been trading for less than 12 months. The Business Current Account offers free day-to-day banking for 25 months. The second account is the Business Choice Account which has a credit interest linked to the Bank of England base rate, an option of an agreed overdraft and personal attention from a business banking contact.
Trustpilot score: 1.7/5 (561 customer reviews)
Monthly fees: 18 months free for new businesses, and then £6.50 thereafter
Lloyds Banking Group provides different business accounts depending on the turnover of the business customer. There are three categories: £0-£3m turnover, £3m-£25m turnover and £25m+ turnover. The company’s bank account was ranked fourth of 14 business bank providers in an independent survey conducted by the Competition and Markets Authority which asked customers if they would recommend their provider to other small and medium enterprise (SMEs), with 61% stating they would. The company’s accounts are for both new and existing businesses. New businesses get 18 months of banking free, while businesses that switch from another bank provider get six months free.
Trustpilot score: 1.6/5 (1,660 customer reviews)
Mixed Payment Plan monthly fees: £6 a month
ePayments Plan monthly fees: £6.50 a month
Other fees: Electronic payment fee: Free Cash payments: £1.50 per £100 Cheques (in or out): £1.50 per transaction
Barclays offers its business customers two types of price plans for its accounts, one is for businesses that use cash, cheques and a range of other transaction methods, while the other is for those businesses that mainly receive electronic payments and make payments through online banking and debit cards.
Customers can change plan whenever they like, and they will be rewarded with a percentage of their charges paid back to them depending on how long they bank with Barclays, and their annual credit turnover. This can range from 5% for businesses with annual credit turnover of up to £99,999 who have been with the bank for 1 to 5 years, to 50% for those who have been with the bank for over 15 years and have an annual credit turnover of more than £2 million.
Trustpilot score: 1.6/5 (135 customer reviews)
Monthly fees: 18 months free for new businesses, and then £6.50 thereafter
The Bank of Scotland is part of the wider Lloyds Banking Group and it offers 18 months free business day-to-day banking for new businesses, as well as free electronic payments, simple pricing and business support through phone, in branch or through online guides. The bank also offers prospective customers an account calculator to work out how much it would cost to bank with them.
The bank received a 54% service quality score in the Competition and Markets Authority’s 2019 report into business bank accounts.
Trustpilot score: 1.5/5 (1,486 customer reviews)
Monthly fees: Free for start-ups for 18 months, then £5 per month if transaction charges are less than £5
High street giant NetWest comes with free accounting software and a discount on DHL Express delivery, which could prove attractive for some business ownera. It's app and online portal are backed up by dedicated business planning assistance, to help users map out their enterprise's journey. With 18-months free for new businesses, there's plenty to like with NatWest's package.
Trustpilot score: 1.5/5 (2,096 customer reviews)
Monthly fees: 12 months free then £5.50
HSBC offers a tiered banking structure, which is more complicated than many other banks. However, its lengthy free period means that the first two years will largely entail zero transaction fees.
Trustpilot score: 1.5/5 (130 customer reviews)
In October 2018, Virgin Money joined forces with Clydesdale Bank, for which Yorkshire Bank holds its trading name for. The bank offers two types of accounts, the first is for either those established small businesses that want to switch bank providers, or those start-ups that have been trading for less than 12 months. The Business Current Account offers free day to day banking for 25 months. The second type of account is the Business Choice Account which has a credit interest linked to the Bank of England base rate, an option of an agreed overdraft and personal attention from a business banking contact.
Trustpilot score: 1.5/5 (1,733 customer reviews)
Monthly fees: Free for start-ups for 18 months, then £7,50
As well as its Business Current Account, Santander has a business version of its popular 1-2-3 account. Start-ups will get a discounted monthly fee of £5 for 18 months, while switchers will get the same discount for 12 months. Thereafter, there is a £12.50 monthly fee. Account holders can earn up to £300 cashback each year, depending on the amount of annual credit turnover they have.
Trustpilot score: 1.4/5 (304 customer reviews)
Monthly fees: Free for start-ups for 24 months, then £5 per month if transaction charges are less than £5
The RBS business accounts offer a solid package, with a Visa debit card, a lengthly free period and added extras, such as free accounting software from FreeAgent and a 60% discount on deliveries using DHL Express. Business owners can do their banking online through the RBS app or over the phone with 24/7 help.
Trustpilot score: 1.3/5 (928 customer reviews)
Monthly fees: Free for 25 months, then £5 unless average balance in month is £10,000 or more
TSB is part of Lloyds Banking Group and this business banking accounts comes with plenty of bonuses. After a lengthy free banking period of 25 months, customers are all put onto one tariff, where the monthly fee of £5 is waived if the average balane in the month is £10,000 or more. Another bonus is the free Square reader, which allows businesses to take payments from customers no matter where they are.
Trustpilot score: 1.2/5 (131 customer reviews)
Monthly fees: Free for start-ups for 18 months, then £8 per quarter
Other fees: All transactions: Free for 18 months and then 40p per transaction
One of the main banking brands in Northern Ireland, Ulster Bank’s services are naturally aimed at businesses based or with significant operations in the region. Businesses can sign up quickly in three steps and enjoy 18 months of fee-free banking. Simple pricing makes this an attractive option.
Trustpilot score: 1.2/5 (97 customer reviews)
£25 per quarter
Bank of Ireland is part of the wider Bank of Ireland Group. It provides business banking services to businesses based in Ireland. However, UK users can access the bank’s services through the Bank of Ireland UK.
Once you've got a business bank account sorted you may want to consider other tools or service types to make your business banking run as smoothly as possible. These include company credit cards, business loans, business insurance and – if business is going really well – a business savings account.
Sooraj Shah is a freelance business, technology and financial writer. He is a contributing editor of the New Statesman and a regular contributor to Forbes, specialising in cloud computing, dev-ops, the internet of things, cyber security, big data, artificial intelligence, and machine learning.
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