Compare bank accounts for sole traders

Do you need a business account as a sole trader? Our guide explores why you might want to open one for your everyday banking.

Promoted
Revolut Business Basic logo
Open a free business bank account
Flexible account options
Mobile app with lots of good features
Ability to issue cards to all employees
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★★★★★
1,100+ customer reviews

Promoted for startups

Finder Award
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Free £50 voucher
  • 24/7 customer support
  • Categorised spending
  • FCA regulated

Promoted for free banking

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No monthly fees
  • Fee-free spending abroad
  • Custom payment links
  • Pots to separate money

Promoted for no fees

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Free for 30 months
  • Free everyday business banking for 30 months
  • Access to a payment app, as well as additional support services
  • Multiple ways to bank

Best for bad credit

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No credit check
  • Open an account in 5 minutes
  • "Cashplus iDraft" once eligible
  • Currency cards for travel

Table: sorted by promoted deals first
1 - 20 of 20
Name Product Account fee Bank transfers Requires credit check Arranged overdraft Accounting integrations Account management Key benefits Business bottom txt Link
Finder Award
OFFER
Revolut Business Basic
Free
5/month then 20p per transfer
FreeAgent, Xero
Online & app
Sign up today and unlock 1 month of a paid plan without subscription fees. T&Cs apply.
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View details
OFFER
Monzo Business Lite
Free
Free
N/A
Online & app
Get a free business account with no monthly fees.
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View details
CASHBACK
ANNA Pay As You Go
Free
£0.20
per transfer
Clear Books, FreeAgent, QuickBooks, Sage, Xero
Online & app
Earn 1% cashback for paying with your ANNA card in selected categories.
Go to site
View details
Finder Award
EXCLUSIVE
Tide Free
Free
£0.20
Free if both accounts are with Tide
Clear Books, FreeAgent, KashFlow, QuickBooks, Reckon One, Sage, Xero
Online & app
Get an £50 voucher when you open a Tide business bank account using the code £50VOUCHER
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View details
OFFER
Multi-Currency Business Account
Free
Free
Xero
Online & app
Earn 10% cashback on your first $1,000 of international transactions with Airwallex (T&Cs apply)
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View details
OFFER
Cashplus Business Go Bank Account
Free
£0.30
Free for first 3 payments sent each month (£0.30 for every transfer thereafter)

By invitation
Clear Books, FreeAgent, KashFlow, QuickBooks, Sage, Xero
Online & app
No annual or monthly fee when you apply using the Finder link
Go to site
View details
Finder Award
FREE TRIAL
The Co-operative Bank Business Current Account
Free
Free

On application (subject to status, eligibility and The Co-operative Bank's Lending policy)
QuickBooks, Sage, Xero, Multiple providers
Branch, online, app & phone
Free everyday digital business banking with the original ethical bank, plus access to the free ‘Go Get Paid’ app from BankiFi to help you get paid faster, rated 4.9 stars. Sole traders or Single Directors only. Charges apply for cash and cheque transactions. Apply online. T&Cs apply.
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View details
FREE TRIAL
Small Business Account
£12.50 per month
(waived in first 3 months)
From £0.30
FreeAgent, Sage, Wave, Xero
Online, app & phone
No monthly account fee for the first three months
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View details
OFFER
Business Account For Start Ups
£8.50 per month
(no account fee for the first 12 months)
Free
(First 100 electronic payments out free per month; 20p thereafter)

N/A
Online, app & phone
Digital banking with no account fee for 12 months*. Free accounting software available to business account holders. T&Cs Apply
*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.
Free accounting software available to business account holders. You must be registered for Online for Business or Commercial Banking Online. UK based businesses only.
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View details
Allica Business Current Account
OFFER
Allica Business Current
Free
Free
Sage, Xero
Online, app & phone
Earn 4.33% AER* (variable) interest rate on a linked savings pot.
Must have been trading for at least 12 months, and have a minimum balance of £50,000 or be an existing loan product customer of Allica Bank.
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View details
Revolut Business Scale
£79 per month
1000/month free then 20p per transfer
FreeAgent, Xero
Online & app
Sign up today and unlock 1 month of a paid plan without subscription fees. T&Cs apply.
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View details
Revolut Business Grow
£19 per month
100/month free then 20p per transfer
FreeAgent, Xero
Online & app
Sign up today and unlock 1 month of a paid plan without subscription fees. T&Cs apply.
Go to site
View details
Finder Award
FREE TRIAL
Business Plus
£5 per month (waived if balance stays in credit and averages over £10,000)
Free
FreeAgent, QuickBooks, Sage, Xero
Branch, online, app & phone
30 months of fee-free Business Banking when you switch to TSB.
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View details
Monzo Business Pro
£5 per month
Free
FreeAgent, QuickBooks, Xero
Online & app
6 months free of Xero accounting & first month of Pro subscription fee free
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View details
Finder Award
CASHBACK
Tide Cashback
£49.99 per month
Free
150 free per month
Clear Books, FreeAgent, KashFlow, QuickBooks, Reckon One, Sage, Xero
Online & app
Get 3 months free with our code, FREEPLAN - Available for a limited time only.
Go to site
View details
Finder Award
OFFER
Tide Plus
£9.99 per month
Free
20 free per month
Clear Books, FreeAgent, KashFlow, QuickBooks, Reckon One, Sage, Xero
Online & app
Get 3 months free with our code, FREEPLAN - Available for a limited time only.
Go to site
View details
Tide Pro
£18.99 per month
+ VAT
Free
Clear Books, FreeAgent, KashFlow, QuickBooks, Reckon One, Sage, Xero
Online & app
Get 3 months free with our code, FREEPLAN - Available for a limited time only.
Go to site
View details
FREE TRIAL
ANNA Business
£14.90 per month
(waived in first month)
Free
50 free bank transfers per month (20p per transfer after that)
Clear Books, FreeAgent, QuickBooks, Sage, Xero
Online & app
Earn 1% cashback for paying with your ANNA card in selected categories.
Go to site
View details
FREE TRIAL
ANNA Big Business
£49.90 per month
Free
Unlimited free bank transfers
Clear Books, FreeAgent, QuickBooks, Sage, Xero
Online & app
Earn 1% cashback for paying with your ANNA card in selected categories.
Go to site
View details
Finder Award
FREE TRIAL
The Co-operative Bank Business Directplus Current Account
£7 per month
(waived in first 30 months)
Free

On application (subject to status, eligibility and The Co-operative Bank's Lending policy)
QuickBooks, Sage, Xero, Multiple providers
Branch, online, app & phone
Free everyday business banking for 30 months with the original ethical bank, plus access to the free ‘Go Get Paid’ app from BankiFi to help you get paid faster. T&Cs apply.
Minimum balance: £1,000+ balance must be maintained, if this falls below £1,000 at any time during a charging period, other relevant transaction charges (including the £7 monthly service charge during the 30 months free banking period) will be applied as outlined in the tariff.
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Can I use my personal bank account as a sole trader?

Unlike limited companies, there’s no legal requirement for a sole trader to open a business bank account.

However, legal aspects aside, most banking providers don’t allow personal current accounts to be used extensively for business purposes.

So, if you’re a sole trader, it shouldn’t be a problem to accept payments for the work you have carried out. But if a high volume of business-related payments is noted going in and out of your personal account, then your bank may contact you and ask you to set up a business account.

Should I get a business bank account as a sole trader?

If you’re going to be doing a huge amount of business banking, we’ve already established that even as a sole trader you probably won’t be allowed to use your personal current account for that.

But apart from that point, there are lots of other advantages that come with setting up a business bank account.

For one, it makes it a lot easier to keep your personal and business finances separate, especially when it comes to the end of the financial year and you need to work out your tax bill.

And then there’s the fact that some business accounts come with great features to help you manage your cash flow and bookkeeping.

Depending on which account you sign up for, you could benefit from an invoice creation service, expenses management, spending categorisation, budgeting tools and tax and VAT calculators. If you already use a different accounting software package, such as QuickBooks or Xero, these accounts can often integrate directly with those too.

And with a raft of new digital account providers on the market, you can usually manage all of this on the go through a click mobile banking app.

How to set up a business bank account as a sole trader

Some banking providers have specific accounts designed for sole traders, while other banks just let you use their standard business account. The application process varies by provider, but most can be completed online now.

In general, when you open a business account as a sole trader, you’ll be asked for proof of ID, proof of address and your contact details (plus your business name and address, if you have chosen to set these up as separate to your own). You might be asked for some details about your business, and a credit check may also be carried out.

How much do business bank accounts for sole traders cost?

This varies depending on which banking provider you go with, but unlike personal current accounts (which many of us are used to getting for free), it is far more common to be charged for using a business account.

Some business accounts come with a monthly fee, typically between £5 and £10, while others are free to set up and operate.

There will often be small charges for individual transactions, such as setting up direct debits, making or receiving payments or depositing cash into the account.

With some accounts, you get a certain number of transactions for free each month, or you may have the option of choosing a plan that reflects your payments mix. For example, if you know you’re going to be paying in a lot of cash, you could choose the plan with cheaper cash transactions charges as opposed to one with cheaper electronic payment charges.

Make sure you take all of this into consideration when you select your account since tiny individual charges can run up to a big total if you’re carrying out a lot of transactions.

And remember to look out for any free introductory offers. Some banks will offer free everyday banking for the first few months or even the first year or two (although you will have to pay any business banking fees after that).

Pros and cons of setting up a business account as a sole trader

Pros

  • Keeps your personal and business finances separate
  • Easier to work out your tax and expenses
  • Some business accounts come with tools to help with invoicing, expense management and tax calculations

Cons

  • Business bank accounts usually come with monthly and/or transaction fees
  • A sole trader with small-scale banking requirements may not need one

Our verdict

It’s not a legal requirement for a sole trader to set up a business account for their banking needs (like it is for limited companies), and business accounts do often come with fees attached. But there are several advantages to opening one, including making the management of your business finances easier and being able to take advantage of any invoicing, cash flow and calculation tools that may come with it.

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Banking scores

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★★★★★ — Subpar
★★★★★ — Poor

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