Are you starting or running a business in the UK? If your answer is yes, then you must know that you will have tons of important decisions to make. One of the important decisions you would make as a UK-based entrepreneur is choosing the right business bank account. You are wondering why it is an important decision, right? Well, aside from the fact that it would help you keep your business and personal finances separate, it also helps to enhance your business credibility with customers and clients.
And with tons of options to choose from—starting from traditional banks to online banks, choosing the UK bank account that is most suitable for your business might be tough. But you should know that it is vital to understand what each bank offers that would be instrumental to the financial growth of your business. In this article, we will explain what a UK business account is, why you need a UK business account, the best UK business bank accounts, and what to consider before choosing a UK Business account.
What Is A Business Bank Account?
In simple terms, a Business Bank Account is one tailored to meet the needs of your business finances. It is a type of financial account designed specifically for companies, sole traders, freelancers, partnerships, and any other business entities. Unlike personal accounts, business accounts allow you to perform diverse transactions under your company’s name, and often offer services like business loans, accounting tools to track financial performance, and credit lines.
Business accounts also allow you to access features and customer support that are specifically tailored to your company or business requirements. They can also help you or your company to build a credit rating, organise your finances, and keep up with tax obligations.
Importance Of A UK Business Bank Account
Firstly, if you are running a limited company in the UK, it is legally required for you to have a separate account for your business. This implies that opening a business bank account as an entrepreneur in the UK is not just an item to tick off your bucket list. Instead, it is a vital part of setting up your company in the UK. Why is it so important? Here’s why:
- It Shows Professionalism:
Imagine you want to pay for the service of a laundry company in the UK, and the name of the account reads “John Duke.” Would you go ahead to pay, or would you think that you are about to be scammed? That’s exactly how it is when you are running a company and you don’t have a business account that shows that you are different from your company. Paying suppliers or receiving payments from clients via a business account makes your company look professional and credible. It shows your clients and customers that they can trust your brand and take you more seriously.
- It Simplifies Tax Compliance and Audits:
In the UK, the HMRC expects businesses to keep accurate records of every financial activity. And a business bank account helps you track all your transactions, which in turn makes it easy to file for self-assessments, company tax returns, and VAT returns. A business bank account would also help you to handle tax audits smoothly.
- It Makes Payrolls And Payments Easy:
Many business accounts integrate directly with accounting tools and payroll software, which makes salary payments, payroll processes, and tax obligations more effective and efficient.
- It Gives Easier Access To Business Support And Credit:
With a business account, you can build a quality financial track record for your business, which can increase your chances of accessing business credit in the future. This is because banks look at your company’s profile and financial history with them before you are eligible for a business loan, overdraft, or even a company credit card. So, having a business bank account sets the pace for future financial support, as much as it helps you stay financially organized.
- It Keeps Your Business And Personal Finances Separate:
With a business bank account, your business income and expenditure are tracked separately from your finances. This helps you manage your cash flow and prevents confusion when it’s time to pay taxes.
Best Business Bank Accounts In The UK
Like we earlier stated, there are tons of banks in the UK suitable for businesses, but we are focused on banks that go above and beyond for their customers. The banks we enlisted in this article are set apart due to their range and features that are curated to help businesses grow their finances. Aside from this, we also considered how they are easy to use, transparent, and trustworthy. After a series of studies and comparisons, we listed the following banks as the best business bank accounts in the UK:
NatWest Business Banking
NatWest Business Banking is regarded as one of the most established and trusted banks in the UK, having supported over a million small and medium-sized businesses. They have a specialist bank account for startups, which has no monthly fees and offers free banking on daily transactions for 2 years. Their key features include:
- Free banking on daily transactions for up to two years for start-up businesses.
- Online and mobile banking with a user-friendly app that makes it easy to manage your finances on the go.
- Access to loans and business funding, including credit cards and overdraft options.
- Free accounting software integration for extra support to startups.
- Dedicated account managers for clients who prefer face-to-face support.
- Free support to help your business grow through the NatWest Entrepreneur Hub.
Tide Business Account
Tide is a digital business banking platform that was built specifically for freelancers, small businesses, and sole traders. It was launched in 2015 and has grown to become one of the most popular fintech companies in the UK. It is popularly known for its simple setup and affordable pricing. You can apply for Tide’s business bank account on their website or mobile app. Their key features include:
- Quick and seamless online account setup.
- No monthly fees.
- In-app invoicing and bookkeeping.
- You can easily connect your accounting software, like FreeAgent, Xero, etc.
- Multi-user access that allows you to share your account with your accountants and finance team.
Starling Business Bank
Known for its mobile-first and award-winning business accounts, the Starling Business Bank is one of the UK’s most popular banks. It was established in 2024 and has grown rapidly due to its seamless user experience and innovations. It is best for businesses looking for a stress-free, low-cost modern account to run their businesses with. The key features include:
- No monthly fees.
- Access to accounting software like QuickBooks and Xero for better bookkeeping.
- Access to overdraft and Business loans.
- Multi-user access that allows you to add your team members and set permissions for financial control.
- Real-time banking app that makes it easy to manage your finances 24/7
Barclays Business Account
Barclays Bank is regarded as one of the most respected and highly established banks in the UK, with a history dating back 300 years. It is well known for its extensive branch network and strong customer service. Barclays also provides support to all companies of all sizes, from start-ups to large companies. It is best for companies and businesses that prefer traditional banking support and a broad product suite. The key features include:
- 12-month daily free banking.
- Access to a business manager and branch network for face-to-face support and guidance.
- Online and mobile banking to give you 24/7 access to your account.
- Access to loans, overdrafts, company credit cards, and commercial mortgages.
- Barclays Smart Investor and market insights to support businesses trying to make investments.
- Access to FreshBooks invoicing and accounting software.
- Access to the Barclays Eagle Labs community hub.
HSBC Business Banking
HSBC business banking is not merely a strong option for UK businesses, but is also one of the world’s largest international banks. It is recommended for any business that wants to trade globally. It is suitable for businesses that want long-term scalability because of its broad range of financial products, strong global presence, and experienced business specialists. The key features include:
- Free business banking for up to 18 months.
- Global reach and access to multi-currency accounts make foreign exchange smoother and cost-effective.
- Access to loans, overdraft, and international trade finance
- Mobile and online banking.
- Dedicated account managers to help with tailored advice and solutions to financial needs.
Lloyds Bank | Small Businesses And Start-Up Account
With a long-standing history of rendering support to small and medium-sized businesses in the UK, Lloyds Bank has proven to be one of the most respected and recognized names in UK banking. It is well known for its dedicated business account managers and is a go-to choice for traditional business banking with flexible options. It is most suitable for startups, small, and medium-sized businesses. The key features include:
- Free Business banking for up to 12 months.
- Access to guidance, training, and mentoring to help businesses grow.
- Mobile and online banking.
- Access to numerous funding options like business loans, overdrafts, invoice financing, etc.
- Access to accounting software like QuickBooks, Sage, and Xero for better bookkeeping.
Monzo Business Bank
Known for its easy-to-use mobile app and transparency, Monzo Business Bank is one of the most popular and reliable digital banks in the UK. It has a simple setup process and modern features that are best suited for small businesses, start-ups, and freelancers. It is also a perfect option for entrepreneurs in need of a tech-savvy business account. The key features include:
- Quick online sign-up.
- A no-monthly fee option: the Lite account is completely free, while the Pro account has features like tax pots and invoicing, which are available for a small monthly fee.
- Access to smart financial tools on the mobile app.
- Access to accounting software like QuickBooks, FreeAgent, and Xero for better bookkeeping.
- Mobile and Online Banking
- Free bank transfers.
Airwallex
Airwallex is a global fintech platform built to make international business payments as easy and simple as possible for entrepreneurs in the UK. It was founded in Australia in 2015 and is ideal for businesses that need to move money across borders at low cost. It has advanced API options and multi-currency accounts that make it a good choice for tech startups, international companies, and e-commerce businesses. The key features include:
- Ultra-low exchange rates and minimal fees that help you save on international transactions.
- Multi-currency accounts (cover over 20+ currencies).
- Easy integration with business software such as Xero, Amazon, and Shopify to automate your financial processes.
- Instant multi-currency virtual and physical cards.
- No monthly account fees for basic features.
Revolut Business Account
Designed for tech-savvy companies and international companies, Revolut is a global fintech company that specialises in currency exchange. It started as a travel money app and has now grown into a business account. It offers multi-currency accounts, smart integrations, and expense control tools, which make it perfect for start-ups and growing businesses. The key features include:
- Multiple currency accounts (up to 25+ currencies) and a competitive FX rate.
- Virtual and physical company cards.
- Expense control tools.
- No monthly fee with the basic plan, and £25 a month for the ‘‘Grow’’ plan.
- Bulk and scheduled payments.
- Easy integration with business software such as Xero and Slack.
- Flexible payment plans (Basic, Grow, and Scale) to choose from.
Virgin Money
Virgin Money is well known as a UK retail and commercial bank formed from the merger of Clydesdale and Yorkshire Bank, with roots in the Virgin Group. Well known for its strong customer service and practical business advice, Virgin Money combines traditional banking with modern tools like mobile banking, easy-to-use features, free banking periods, and a growth-focused approach to help companies at every stage, from start-up to scale-up. The key features include:
- No monthly fees.
- Access to loans, overdrafts, and asset finance.
- Mobile and online banking.
- Access to business support and networking events.
- Access to flexible account options depending on your business type.
- Easy integration with accounting software such as QuickBooks and Xero
| Bank | Key Features | Account Type |
| NatWest | Free banking for up to 2 years. | Traditional |
| Tide | App-based business banking. | Digital |
| Starling | Fee-free everyday business banking. | Digital |
| Barclays | Free accounting software. | Traditional |
| HSBC | Multi-currency accounts for international trade. | Traditional |
| Lloyds | Free business banking period for new customers. | Traditional |
| Monzo | Access to smart financial tools on the mobile app. | Digital |
| Airwallex | Multi-currency accounts and international payments. | Fintech |
| Revolut | Multi-currency accounts and international payments. | Fintech |
| Virgin Money | Access to business support and networking events. | Traditional |
Choosing a UK Business Bank Account
Before you choose a UK business bank account for your business, you should consider the following:
- The needs and size of your Business:
You should consider the scale of your business and what you can afford per month/year. Think of your business structure. If your business is a small/medium enterprise or still in the start-up phase, you should not choose a bank account with high account maintenance costs.
- Fees:
You should compare the monthly fees and transaction charges, and the rate of international transfers. If you are in your startup phase, you should maximize banks that offer completely free banking, or those for the first 12 – 18 months of use. This is to save more money during your startup stage.
- Access to smart financial tools:
If you plan to trade globally, you should look out for banks that offer access to accounting software like Xero, QuickBooks, Amazon, etc., invoicing tools, and even multi-currency accounts.
- Access to :
In order to avoid the need to switch accounts as your company expands, you should choose a bank that can grow with you. What this means is, choose a bank that has flexible funding options that would favour your business in the long run.
- Customer support:
If you would prefer face-to-face support, banks like NatWest and Barclays offer in-branch support. And if you would prefer online support, banks like Starling and Tide offer convenient in-app services. The point is, decide what would be feasible for you on a long-term basis, and choose your bank.
How To Open A UK Business Bank Account
Opening a UK business bank account isn’t any different than opening a normal bank account. However, it would require certain documents that you would need to submit to the bank, whether you are registering online or in person. To open a UK business bank account, you would need the following documents:
- A valid passport or a UK driver’s license as proof of identity.
- Contact information for everyone who would be using the account, including names, date of birth, and a three-year address history.
- Your business name and the Companies House Registration Number.
- An estimation of your business’s annual turnover.
Some banks might require your accounts on Companies House to be up-to-date before your application can be accepted. You could ensure it is up to date before opening a business account. Also, the process of opening a business bank account in the UK can be done online. Just ensure you have all your documents ready and updated.
Conclusion
When it comes to choosing the right business bank account in the UK, whether it is about low fees, in-app features, or customer support, there is always a perfect fit for your account. All you need to do is take out time to evaluate what your business needs and compare it with the feature that aligns most with your business structure and needs. If you need more clarity on any of the bank’s key features, you should visit the bank’s website and get more information on the services they provide.
