Business bank accounts for contractors in the UK 2022

From a finance and tax point of view, contractors are no different from other types of business, meaning that they can hugely benefit from having their own dedicated current account.

A business account is a great financial tool to get paid, manage expenses, and keep your finances in good working order.

Compare business accounts for contractors in the UK

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Name	Product	Account fee	Bank transfers	Interest (AER)	Accounting integrations	Arranged overdraft	Account management	Key benefits	Link
OFFER Mettle by Natwest Account Mettle by Natwest Account	OFFER	Free	Free	0% AER	FreeAgent, QuickBooks, Xero		App	Comes with a suite of free accounting software to integrate with (conditions apply)	Go to site View details		loading Fetching your data...
EXCLUSIVE Tide Free Account Tide Free Account Finder Award	EXCLUSIVE	Free	£0.20 Free if both accounts are with Tide	0% AER	Clear Books, FreeAgent, KashFlow, QuickBooks, Reckon One, Sage, Xero		Online & app	FINDER EXCLUSIVE: Get 5 months free transfers when using the code FINDER5FREE. Plus register your limited company for free (usually £12) and open a Tide account in one go: choose 'Register a company' from the Tide homepage menu. T&C's apply.	Go to site View details		loading Fetching your data...
FREE TRIAL Business Current Account - e-Payments Plan - Start-ups Business Current Account - e-Payments Plan - Start-ups	FREE TRIAL	£8.50 per month (waived in first 12 months)	Free for EU digital transfers (SEPA)*	0% AER	Multiple providers	Subject to application, financial circumstances and borrowing history.	Branch, online, app & phone	No monthly account fee for 12 months on the Start up business plan, thereafter a monthly charge of £8.50 applies. Other charges apply. *Charges for other bank transfers and card payments apply. Visit here for more information. Free invoice and accounting software, provided by FreshBooks, with your Barclays business account. T&Cs apply.	Go to site View details		loading Fetching your data...
OFFER Cashplus Business Bank Account Cashplus Business Bank Account	OFFER	Free	£0.30 Free for first 3 payments sent each month (£0.30 for every transfer thereafter)	0% AER	Clear Books, FreeAgent, KashFlow, QuickBooks, Sage, Xero	By invitation	Online & app	No annual or monthly fee when you apply using the Finder link	Go to site View details		loading Fetching your data...
FREE TRIAL The Co-operative Bank Business Current Account The Co-operative Bank Business Current Account	FREE TRIAL	£10 (waived in first 30 months)	Free	0% AER	N/A	On application (subject to status, eligibility and The Co-operative Bank's Lending policy)	Branch, online, app & phone	Free everyday business banking for first 30 months. Sole traders or Single Directors only. Apply online. Charges apply for cash and cheque transactions & other special services. Subject to status, eligibility and T&Cs.	Go to site View details		loading Fetching your data...
Countingup Starter Business Account Countingup Starter Business Account		£3 per month (waived in first 3 months)	£0.30	0% AER	N/A		Online & app	0.3% cashback on purchases for new and existing customers, available until 31 of May.	Go to site View details		loading Fetching your data...
OFFER Juni Account - Made for ecommerce Juni Account - Made for ecommerce	OFFER	Free	Free	0% AER	Xero		Online	IBAN accounts in EUR, USD and GBP available. New customers get 2% cashback on all their virtual Juni card spend for the first 30 days. Made for ecommerce companies.	Go to site View details		loading Fetching your data...
OFFER Small Business Account Small Business Account	OFFER	£12.50 per month (waived in first 3 months)	From £0.30	0% AER	N/A		Online, app & phone	No monthly account fee for the first three months	Go to site View details		loading Fetching your data...
Kapaga Standard Business Account Kapaga Standard Business Account		£59.99 per month		0% AER	N/A		Online		Go to site View details		loading Fetching your data...

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Latest reviews of business accounts for contractors

Barclays - Business Current Account - e-Payments Plan - Start-ups

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• Why it’s great
• Pros/cons
• Details

No monthly account fee for 12 months on the Start up business plan, thereafter a monthly charge of £8.50 applies.

This start-up business account from Barclays offers free banking for the first 12 months, with no fees for standard transactions. After the 12 months are up, you can choose from two Price Plans, designed for the way your business makes and receives payments. The e-Payments Plan will likely be better for contractors as it's suitable for businesses that mainly make and receive payments via electronic payments, online banking and debit cards, and it costs £8.50 a month. The Mixed Payments Plan is suitable if your business uses cash, cheques and electronic payments, and has a monthly fee of £8. Transaction fees apply to both plans. You will also benefit from free invoicing and account software from FreshBooks, and access to a UK-based team of business managers to help you grow your business. You can apply for the account via the app, online or over the phone.

• 12 months of free banking
• Multiple ways to bank – online, mobile, telephone or in-branch
• Dedicated business support team

• Fees apply after the initial free 12 months
• For startups only (although Barclays has other accounts available for more established businesses)
• No interest paid on in-credit balances

Account fee	£8.50 per month (waived in first 12 months)
Bank transfers	Free for EU digital transfers (SEPA)*
Accounting integrations	Multiple providers
Requires credit check	Soft search with no impact on credit score
Overdraft	Subject to application, financial circumstances and borrowing history.

Lloyds Bank - Business Current Account

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• Why it’s great
• Pros/cons
• Details

12 months' fee-free monthly and transactional banking for switcher customers.

This business account from Lloyds is designed for start-up and small businesses that have an annual turnover of less than £3 million. New businesses can enjoy free everyday business banking for the first 12 months, after which a monthly account fee of £7 will apply. Certain transaction fees will also apply after 12 months, such as for cheques and cash payments. Further benefits of the account include dedicated support from the Lloyds UK-based business management team, and access to useful guides and business tools. To be eligible for the account you must be aged 18 or over and a sole trader, partner or company director. It usually takes up to 4 weeks to open your account which can be managed via online banking or via the app. There's the option to apply for a business overdraft and you'll also be able to integrate your account with Business Finance Assistance (for a fee).

• Free everyday banking for first 12 months
• Free electronic payments
• Access to Business Finance Assistance and Lloyds Bank Academy

• Fees apply after first 12 months
• No interest paid on credit balances
• Fee applies to Business Finance Assistance after three months

Account fee	£7 per month
Bank transfers	Free
Accounting integrations	N/A
Requires credit check	Soft search with no impact on credit score
Overdraft	Up to £5,000 subject to eligibility and application

Tide - Tide Free

★★★★★

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• Why it’s great
• Pros/cons
• Details

FINDER EXCLUSIVE: Get 5 months free transfers when using the code FINDER5FREE.

The Tide business account offers three different pricing plans, with its free option likely to be most suitable for contractors, sole traders and freelancers. As your business grows, you can upgrade your plan at any point, so long as you are happy to pay a monthly fee. All plans enable you to sync your account with accounting software like Quickbooks, Sage, KashFlow and Xero. You'll also be able to automatically categorise transactions, send, pay and track invoices and upload receipts. ATM withdrawals cost £1 each, while other transaction fees will depend on the plan you have chosen. The 2 paid-for plans offer the most benefits, including in-app and phone support, plus a 24/7 legal helpline. It should only take 10 minutes to open your Tide business account and no credit checks will be carried out. Your Tide card should arrive within 2 to 4 working days.

• 24/7 customer support
• Categorised spending
• FCA regulated
• Quick set-up
• No monthly fees
• Easy to manage accounts and track payments within the app
• Ability to set up direct debits and standing orders
• Can receive online bank statements

• No branches - all done via the web
• Doesn't accept cheque deposits
• No personal accounts
• No international
• Transfers or interest offered

Account fee	Free
Bank transfers	£0.20 Free if both accounts are with Tide
Accounting integrations	Clear Books FreeAgent KashFlow QuickBooks Reckon One Sage Xero
Requires credit check
Overdraft

Cashplus - Cashplus Business Bank Account

★★★★★

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• Why it’s great
• Pros/cons
• Details

No annual or monthly fee when you apply using the Finder link.

This account from Cashplus is a straightforward business account with no monthly or annual fees, making it a great option for contractors. You can sign up for a Cashplus business account in a matter of minutes and once your application is approved, your card should arrive within 3 to 5 working days. Through the account you'll be able to deposit cash or money via bank transfer, use your card online, instore or to withdraw cash, pay bills, suppliers and expenses online, and sort and categorise spending on the go via the app. If you employ staff, you'll also be able to order up to 20 additional cards and track expenses and block certain transactions. The account can also be integrated with accounting software to make managing your finances that bit easier. Any funds you deposit into the account will be protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.

• Have account up and running in 5 minutes
• Overdraft option "Cashplus iDraft" once you're eligible
• Currency cards to use overseas
• Online services in addition to the mobile app

• Charge to have your bank card issued
• Traditional bank still needed for majority of your business finance needs

Account fee	Free
Bank transfers	£0.30 Free for first 3 payments sent each month (£0.30 for every transfer thereafter)
Accounting integrations	Clear Books FreeAgent KashFlow QuickBooks Sage Xero
Requires credit check
Overdraft	By invitation

Metro Bank - Business Bank Account

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• Why it’s great
• Pros/cons
• Details

The easiest way to open this business account from Metro Bank is to apply online and your account should be up and running within a matter of minutes. Alternatively, you can apply for the account at your local branch. The account has no monthly fee and offers 30 free UK transactions each month, provided you keep your balance at £6,000 or more for the whole month. If you don't, a £6 monthly fee will apply and each transaction will cost 30p. There are no fees for using your card in Europe and you'll also receive business support from a Local Business Manager. Further benefits include access to smart accounting software, including digital receipt capture and direct bank feeds with Xero, and a year's free access to Enterprise Nation's network of business support. You can also choose to apply for an overdraft with your business account.

• No monthly fees
• Easy to open
• Fee-free card transactions in the UK and abroad
• Access to accounting software

• Fees apply to certain transactions
• No interest paid on balances
• Interest applies to overdraft

Account fee	£6 per month. Fee waived if account balance £6000+
Bank transfers	£0.30
Accounting integrations	Xero
Requires credit check	Soft search with no impact on credit score
Overdraft

Do you need a business bank account as a contractor?

If your business is set up as a limited company, then yes. As your business is a separate legal entity, its finances must not be mixed with your personal ones.

If you are set up as a sole trader instead, technically there is nothing stopping you from using your personal account for professional purposes. However, it’s not advisable because it will make it harder to separate the two things, work out how much you earn exactly, keep track of paid invoices and so on.

Using your personal account for business purposes is also likely to violate your bank’s terms and conditions.

How to open a business account if you are a contractor

Depending on the account provider you choose, you will be able to open the account in person or online.

You will need to provide both your business and your personal details and documents, including:

• Your business name and address
• Companies House registration number if you’re a limited company
• Certificate of incorporation
• Your own personal details and contact information
• A form of ID
• Proof of address
• Estimated business turnover
• Personal bank or financial statements

Eligibility criteria and required details and documents can vary from bank to bank.

How to compare business bank accounts for contractors

There is no such thing as dedicated business accounts for contractors, so you’ll have to make do with what the market has to offer to small businesses in general. Some things to consider are:

• Application process. Setting up a business account can take time with some banks, while others are quicker and easier to deal with. As a contractor, you may not need a super complicated account with lots of features, so it’s worth looking for a more straightforward and sleek option.
• Costs and fees. Business accounts tend to be more expensive than personal accounts, so always check them carefully.
• Managing the account. How do you prefer managing your account? Online, in person, over the phone? Some banks will not offer all the options, so it’s worth considering this in advance.
• App and digital services. These days having a good digital banking service and a slick banking app makes all the difference, especially for a busy contractor who doesn’t want to spend a lot of time dealing with banking administration.
• Customer service. If anything goes wrong, you want a bank that can help you sort things out quickly and efficiently. Having a look at the bank’s reviews online can’t hurt.
• Extra features. A lot of business bank accounts include features that can help you manage your business finances, such as overdrafts, invoicing and accounting services, and budgeting features in the banking app.

As a contractor, you might find it useful to have a look at online-only business accounts, especially if you don’t deal with cash and are comfortable with technology.

Online business accounts tend to be quicker to set up and cheaper, and pay particular attention to their mobile banking apps, which tend to work better and have more features.

Pros and cons of a business bank account if you are a contractor

The bottom line

Business bank accounts may sound complicated, but in fact it’s quite easy to get one for a small business, and it will help you organise your finances and manage them easily.

As a contractor, you probably want to look for a straightforward business account without too many frills, that can be accessed online in no time from wherever you are.

Frequently asked questions

• Are business bank accounts safe?

  As long as your business account is with a fully licensed bank, it will be covered by the FSCS, which means that your deposits are protected up £85,000.

  If you choose a digital provider that is not a fully licensed bank, make sure that it is still registered with the Financial Conduct Authority. Most will have an electronic money licence, meaning that even if they are not protected by the FSCS, your deposits will be kept in so-called “segregated” accounts that cannot be accessed by the company, even if it were to go bust.

• Do I need to open my business account in person?

  It depends on the bank, but if you choose a traditional bank (Barclays and the like) you will often have to visit a branch to open a business account, unless you are already an existing customer.

• Can I get a free business account?

  Yes, some banks do offer business accounts that are almost completely fee-free; have a look at Starling Bank, for example. You will likely have to pay a monthly fee if you want its most advanced features though.