Why the branch is no longer the default
High street banks still hold plenty of business accounts, but the application route has changed. Branch closures across smaller towns mean an appointment can take weeks, and paperwork often has to be posted or scanned. For a sole trader fitting jobs around client work, that delay is expensive.
Cash is the first hidden cost. A café, market stall or tradesperson paying in takings each week can lose a meaningful slice of that money to percentage-based deposit charges. Tide charges 3% at the Post Office or PayPoint, Starling charges 0.7% with a £3 minimum, and Monzo charges £1 per deposit. On £400 of weekly cash, the gap between those rates adds up to hundreds of pounds over a year. Anyone comparing a business bank account with no monthly fee should read the deposit line before the headline price.
Keeping money separate is the second issue. Sole traders who run everything through a personal account find self-assessment harder, and HMRC can ask to see records that were never kept. A dedicated sole trader business account fixes the paper trail without adding accountancy costs.
Sector and eligibility rules are the third. Some providers decline businesses involved in gambling, crypto or money services. Others require at least one UK-resident director. Tide, for example, runs no hard credit check, which matters if you have a thin credit file.
Cross-border income is the fourth. A designer invoicing a German client in euros, or a shop buying stock in dollars, will feel every percentage point of FX markup. A multi-currency business account can remove that friction, though it usually sits alongside a main UK account rather than replacing it.
What the main options actually cost
| Provider | Monthly cost | Cash deposits | Strongest for | Watch out for |
|---|
| Tide | No monthly fee; Smart £12.49 + VAT; Pro £24.99 + VAT; Max £69.99 + VAT | 3% at Post Office or PayPoint | Invoicing, tax tools, team expense cards | Not a bank itself; accounts provided by ClearBank |
| Starling | No monthly fee; euro account £2 | 0.7%, £3 minimum | Sole traders and limited companies wanting a full bank | New USD account applications paused |
| Monzo Business | Lite no monthly fee; Pro £5 | £1 at Post Office or PayPoint | Clean app, tax pots, simple invoicing | Only sole traders and limited company directors |
| ANNA Money | Pay as you go no monthly fee; Business £14.90 + VAT; Big Business £49.90 + VAT | Plan-dependent | Tax reminders and admin tools | Electronic money provider, not a bank |
| Revolut Business | Basic £10; Grow £35; Scale £125 | Plan-dependent | FX, cards, international payments | Some business categories fall outside deposit protection |
| Wise Business | £45 one-off; no monthly fee | Limited | Multi-currency payments and batch transfers | Not a UK bank; balances are safeguarded, not FSCS-backed |
Prices move, so confirm the current schedule on each provider's site before you apply. What the table shows is the shape of the market: the business bank account UK comparison is less about monthly cost and more about where your money arrives from.
Matching the account to how your business earns
Priya, a graphic designer in Bristol, invoices six regular clients and works alone. She needs payment links, invoices she can send from her phone, and a clear pot for tax. A Starling business account or Monzo Lite covers the basics at no monthly cost. Paying £5 for Monzo Pro adds accounting software integration, which saves her a Sunday afternoon each month. Her limited company bank account application was approved in the app, and the Companies House details were checked automatically.
Dan runs a kitchen-fitting firm in Leeds with three staff. He takes card payments on site and pays in cash most Fridays. His Post Office branch is a ten-minute walk, so Starling's 0.7% deposit charge beats Tide's 3% on his volumes. Tide Pro would suit him better if he wanted expense cards for each fitter and unlimited invoicing in one place, though cash handling would cost more.
Aisha sells homeware online from Manchester, with customers in Ireland, the Netherlands and the US. She keeps a Starling account for UK direct debits and uses a Wise Business account for euro and dollar receipts. That split gives her a FSCS protected business account for the money she relies on, plus cheaper conversion on the money that moves across borders.
The small print that costs money later
Deposit protection is not identical across providers. A bank authorised in the UK covers eligible deposits up to £85,000 under the Financial Services Compensation Scheme. An electronic money institution safeguards your money in separate accounts instead, which protects it if the firm fails but is not the same guarantee. If you hold large balances, ask directly which regime applies to your business type.
Payment rails matter too. Confirmation of Payee warns you when an account name and number do not match, which cuts down on invoice fraud. Faster Payments usually land within seconds, but some providers hold first-time payees for checks. International transfers can take two to three working days and carry intermediary bank charges.
Cheque handling is another quiet difference. Starling accepts cheque images under £1,000 through the app. Others require posting cheques, adding several days. If you still receive cheques from trade customers, test that flow before you commit.
Finally, check what happens when you want to leave. The Current Account Switch Service covers most UK banks and moves payees, standing orders and direct debits within seven days, with payments redirected afterwards. Not every online provider belongs to the scheme, so ask before you switch business bank account to a newer platform.
A workable application sequence
- Write down your monthly inflow: card takings, bank transfers, cash, overseas payments. That single list tells you whether deposit fees or FX costs will dominate.
- Gather your Companies House number if you trade through a limited company, plus your UTR and proof of trading address. Sole traders need photo ID and a business address.
- Apply to two providers at once. Approval is not guaranteed, and a decline from one does not affect the other in most cases. Tide advertises approval in minutes for straightforward applications.
- Run a small test payment in each direction before moving direct debits. Send £10 out, receive £10 in, and check the notification and statement descriptions.
- Set up tax pots or savings spaces on day one. Separating VAT and corporation tax at source is far easier than reconstructing it in January. Local Growth Hubs and chambers of commerce in cities such as Leeds, Bristol and Manchester run free-to-attend finance sessions if you want a second opinion.
Read the fee schedule once more before you press submit. The account that looks cheapest at application is rarely the cheapest at the end of the tax year. Start with the flows you actually have, not the features on the marketing page, and the online business bank account you choose will still fit when your turnover doubles.
This article is general information, not financial advice. Check each provider's terms and your own obligations with HMRC before making a decision.
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