Best business bank accounts for contractors in the UK 2024

Depending on how you have set up your contracting business, you will likely need a business account. Here are some tips on how to find the best one.

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.

Latest reviews of business accounts for contractors

Tide - Tide Free

Tide Free
Finder rating
★★★★★
Customer rating
★★★★★
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Get an £80 voucher when you open a Tide business bank account using the code £80CASHBACK.
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 N/A
Bank transfers N/A
Accounting integrations Clear Books
FreeAgent
KashFlow
QuickBooks
Reckon One
Sage
Xero
Requires credit check N/A
Overdraft N/A

Cashplus - Cashplus Business Go Bank Account

Cashplus Business Go Bank Account
Finder rating
★★★★★
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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.
  • Open an account in 5 mins
  • "Cashplus iDraft" once eligible
  • Currency cards for travel
  • 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 N/A
Bank transfers N/A
Accounting integrations Clear Books
FreeAgent
KashFlow
QuickBooks
Sage
Xero
Requires credit check N/A
Overdraft N/A

Metro Bank - Business Bank Account

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 N/A
Bank transfers N/A
Accounting integrations Xero
Requires credit check N/A
Overdraft N/A

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.

Learn more about using your personal bank account for your business.

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

Pros

  • If you own a limited company, you must get a dedicated business account.
  • It makes it easier to manage your business finances and keep track of payments.
  • Some business accounts are relatively easy and quick to set up.
  • You can get extra features to help you with your business finances, from overdrafts to accounting software integration.
  • You can manage most business accounts online or from your phone.

Cons

  • Business accounts usually have more fees compared to personal accounts.

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

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