Best business bank accounts for the self-employed and sole traders

Discover everything you need to know about opening a business bank account if you're self-employed.

It can be a good idea to create a separate bank account to manage your finances when you’re self-employed. A number of providers offer bank accounts that have been designed for those who are self-employed.

Reviews of self-employed business accounts

Revolut - Revolut Business Basic

Revolut Business Basic
Finder rating
★★★★★
Go to site Read review
Sign up today and unlock 1 month of a paid plan without subscription fees.
If you're self-employed, there are 3 different pricing plans to choose from with the Revolut business freelancer account. The first is a free option which can be great if you're only looking for a few basic features and are just starting out. Alternatively, you can pay a monthly fee to benefit from additional features including a larger number of fee-free international payments and local payments. Paid-for plans also offer a free foreign exchange allowance, making it a good option if you often do business overseas. You can hold and exchange more than 25 currencies with the account. Further benefits include the option to connect to accounting software such as Xero, QuickBooks and Slack, and the ability to create and track invoices. It's quick and easy to sign up to an account via the Revolut app.
  • Flexible account options
  • Mobile app with lots of good features
  • Ability to issue cards to all employees
  • Easy to apply
  • Freeze card if lost or stolen
  • Safe and secure
  • Free purchases
  • Basic account does not include many free transactions
  • All ATM withdrawals incur a charge
  • Can't deposit cash or cheques into your account
  • Not yet a fully fledged bank
  • Direct debits only available for EUR accounts
Account fee N/A
Bank transfers N/A
Accounting integrations FreeAgent
Xero
Requires credit check N/A
Overdraft N/A

HSBC - HSBC Kinetic Current Account

HSBC Kinetic Current Account
Customer rating
★★★★★
Read review
No monthly account fee for the first 12 months.
This everyday business bank account from HSBC has no monthly maintenance fee for the first 12 months, making it ideal if you're only recently self-employed. The fee is £6.50 per month after this. You can apply for the account in minutes via the app and most accounts are opened within 48 hours. The account lets you manage direct debits, standing orders and future payments with ease. Customers can also apply for an overdraft of up to £30,000 in-app, get insights on their business spending with automatically categorised transactions, and keep track of their finances with a monthly breakdown of cash flow. You'll also be able to freeze your debit card if you misplace it, and unfreeze it again when found. Plus you can scan and deposit cheques in the app and make payments of up to £25,000 per day. Larger payments can be made via business telephone banking.
  • Easy to apply for and manage
  • Arranged overdraft
  • Useful app features to help you track spending
  • No monthly fee for 12 months
  • Interest is charged on overdraft
  • Monthly maintenance fee applies after first 12 months
  • No interest paid on credit balances
Account fee N/A
Bank transfers N/A
Accounting integrations QuickBooks
Sage
Xero
Requires credit check N/A
Overdraft N/A

Tide - Tide Free

Tide Free
Finder rating
★★★★★
Customer rating
★★★★★
Go to site Read review
Get an £80 voucher when you open a Tide business bank account using the code £80CASHBACK.
You can choose between three different pricing plans with the Tide business account. This includes a free option which could be suitable for freelancers, sole traders and contractors. You can then upgrade your account at any time as your business grows, but a monthly fee will then apply. All options enable you to sync your account with accounting software like Quickbooks, Sage, KashFlow and Xero, as well as 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. You can hold up to 5 business accounts and get 'read access' for team members, allowing them to view and download transactions. Opening an account can take as little as 10 minutes and no credit checks are 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

Starling Bank - Business Current Account

Business Current Account
Finder rating
★★★★★
Customer rating
★★★★★
Read review
This business account from digital bank Starling has no monthly fees or UK payment charges, making it ideal for sole traders and limited companies. You can apply for the account with ease via the app and you'll also benefit from free 24/7 UK support via the app, phone or email. You can integrate the account with accounting software Xero, Quickbooks and FreeAgent, as well as benefit from automated business spending categorisation, receipt capture, free ATM withdrawals and fee-free spending on your card abroad. You can also choose to pay to bolt on extras such as a Business Toolkit to create and send invoices, record VAT and submit your VAT return, and carry out HMRC tax calculations. Or you can open a Euro business account for exchanging and holding euros and a US dollar business account for holding, sending and receiving US dollars.
  • Add the new Business Toolkit onto your free Starling account and get the first month free of charge (RRP £7pcm)
  • Completely free UK current account opened and ready to use in 20 minutes
  • Safe and secure
  • Fully licensed by the FCA and PRA
  • Free to use your card abroad including ATM withdrawals, splitting the bill made easy with "settle up" feature, competitive and comprehensible overdraft fees
  • Decent interest rate paid on current account balances
  • Efficient app offering a range of good features such as budgeting tools and saving features
  • Has a marketplace offering competitive pensions
  • Mortgages and insurance from other growing fintech companies
  • Teen account options
  • 24/7 customer support (for all types of enquiries)
  • Relatively new so does not offer every feature, e.g. mortgages
  • No bank branches, all done via the web
  • Only available to UK residents
Account fee N/A
Bank transfers N/A
Accounting integrations FreeAgent
QuickBooks
Xero
Requires credit check N/A
Overdraft N/A

Mettle by NatWest - Mettle by NatWest - Mobile business bank account

Mettle by NatWest - Mobile business bank account
Finder rating
★★★★★
Customer rating
★★★★★
Go to site Read review
Get FreeAgent included - all you have to do is make at least one transaction a month from your Mettle account.
One of the biggest draws of this business account from Mettle is that it's completely free to use. You can also apply in a matter of minutes from the app. Mettle is part of the NatWest Group and its account offers a range of features and benefits. These include assistance with invoicing, the option to set up Money Pots so that you can save for things like tax and new equipment, plus an overview of your cash flow at any time so you can keep track of your spending and income. You can also sync the account with accounting software such as FreeAgent, QuickBooks and Xero. To apply you must be a sole trader or limited company with up to two owners, and have a balance of less than £50,000 for sole traders, or £100,000 if not. You must also be a UK-based company and be a UK resident.
  • Quick and easy application
  • Freeze your card if you lose it
  • Free, with useful features
  • Backed by the Natwest group
  • Sleek easy to use app
  • Overdrafts are unavailable
  • Daily payment limit of £10,000
Account fee N/A
Bank transfers N/A
Accounting integrations FreeAgent
QuickBooks
Xero
Requires credit check N/A
Overdraft N/A

Cashplus - Cashplus Business Go Bank Account

Cashplus Business Go Bank Account
Finder rating
★★★★★
Go to site Read review
No annual or monthly fee when you apply using the Finder link.
The Cashplus business account charges no monthly fee and no fees for UK purchase transactions. Signing up for the account can be completed in a matter of minutes and once your application is approved, your card will arrive in 3 to 5 working days. Once your account is up and running, you can deposit cash via bank transfer or the Post Office, use your card online and instore or to withdraw cash, pay bills and expenses online and categorise spending on the go via the app. You'll also be able to track expenses and block certain transactions, order up to 20 additional cards, download statements for each card in CSV format online, manage cards via a centralised management system, and integrate your account with accounting software. Funds are also protected up to £85,000 by the Financial Services Compensation Scheme.
  • 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

Do I need a business bank account or can I use my personal one?

If your business is set up as a partnership or a limited company, you’ll have to run your business finances through a business bank account, for tax and legal purposes.

If your business is a sole proprietorship, you are still taxed as an individual, so there’s no obligation for you to open a business bank account.

However, you may still find it useful to separate your business and personal expenses. Learn more about using your personal bank account for your business.

Can you transfer money from a business account to a personal one?

Yes, most business owners will pay themselves a salary – and perhaps an occasional bonus – from their business account into their personal account.

The important thing to do is to record and declare these transactions, for tax and bookkeeping reasons.

In many cases, these payments will be delivered automatically using a payroll software provider, so that they are automatically recorded and the taxes are paid.

If your business is set up as a partnership or a corporation, all one-off payments to your personal account will need to be signed off by your business partners.

Why is a business bank account useful for sole traders?

Although it is not a legal requirement, there are many advantages to having a business bank account as a sole trader.

How to choose and compare a bank account for a sole trader

As with any financial product, the key to finding the best business bank account is to shop around and compare your options.

As part of your comparison, you’ll need to consider which features are the most important to you. For example, are you willing to pay a monthly fee or would you prefer a free account? Keep in mind that there may still be charges for certain transactions such as transfers and cash withdrawals.

You should also think about whether you might need an overdraft, whether you want your account to link to accounting software such as QuickBooks and Zero, whether you need invoicing support and whether you need to regularly bank overseas.

Don’t forget to also consider how you want to manage your account. Are you happy to bank solely online/via an app or would you like the option of being able to pop into a branch? When you’ve considered these options, you should find it easier to find the right account for you.

What does a sole trader need to apply for a business bank account?

The application process varies between business account providers, but you will always need the following:

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

Pros and cons

Pros

  • Business bank accounts allow you to separate your business and personal funds. This makes accounting and bookkeeping far easier.
  • Many accounts include useful incentives and improved rates on international payments.

Cons

  • Business accounts don’t tend to have as many incentives as personal bank accounts.
  • Many of the best business bank accounts have monthly account fees and may charge you for making payments.

Bottom line

For most types of business, it is compulsory to have a business bank account. Even if this isn’t the case for them, the majority of business owners recognise the advantages of opening one. The key benefit of opening a separate bank account for a sole trader’s business revenue is that this helps with tax calculations and enables the business owner to understand their cashflow situation easily.

Frequently asked questions

Banking scores

★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor

Finder scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey.

To find out more, read our full methodology.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Moneyfacts.

More guides on Finder

Go to site