What has changed in UK business banking
A decade ago, opening a business current account meant a branch appointment, a folder of paperwork and a wait measured in weeks. Nearly all of that setup now happens on a phone, and the choice sits between licensed banks with full current accounts and payment firms that bolt a sort code onto an app. The practical differences are rarely about whether the account works. They are about how you are charged once the honeymoon ends.
Three frictions come up again and again with owners who have already opened an account and regretted the details. The first is the word "free". A free business bank account in the UK usually means no monthly fee for a fixed opening period, after which you pay per automated payment, per cash deposit and per international transfer. Two years of inclusive banking followed by 35p a transaction is a very different product from a permanent zero-fee plan with limited transfer allowances. Read the paragraph after the introductory period before you press submit.
The second is cash. Plenty of online-only providers do not accept notes at all, or route deposits through the Post Office and PayPoint with a charge attached. If you run a market stall, a café or a trade that still gets paid in twenties, the deposit route matters more than the app design. Check where your nearest counter is and what each deposit costs, because a busy Saturday can quietly eat a tenner a week.
The third is the difference between a bank and an e-money institution. Not every account with a debit card and a sort code is a licensed bank. Licensed banks hold eligible deposits under the Financial Services Compensation Scheme; e-money firms safeguard client money in a different way, which is perfectly lawful but not the same promise. If your balance regularly sits in five figures, read that section of the terms rather than the homepage headline.
One more point that saves hours later: accounting. Most small firms connect the account to Xero, QuickBooks or FreeAgent within the first month. A business current account with accounting integration that syncs natively means invoices, VAT and payroll reconciliation happen without a Sunday spent downloading spreadsheets. Export-only connections are workable but tedious.
The main options side by side
Fees below are indicative and change often, so confirm on the provider's own pricing page before applying.
| Provider | Monthly cost | Best suited to | Strengths | Watch out for |
|---|
| Starling Bank | £0 for the GBP business account; £2 for a euro account | Sole traders and small limited companies wanting a licensed bank with a strong app | Full UK bank, free standard UK transfers, receipt capture, good accounting links | No branch network; cash deposits have limits |
| Tide | £0 entry plan; Smart from £12.49 | New businesses testing the water | Fast setup, invoicing, Making Tax Digital tools, deposits via Post Office and PayPoint | Entry plan includes only a handful of transfers each month; card and FX charges apply |
| Monzo Business | Lite £0; Pro £5 | Directors who want tax pots and multi-user access | Clear pricing, tax pots, virtual cards, Xero offer on the paid tier | Cash paid in at Post Office or PayPoint carries a small charge |
| ANNA Money | Pay-as-you-go £0; Business £22.90; Big Business £59.90 | Small firms drowning in admin | Invoicing and chasing late payers from the app, 60 transfers included on paid plans | Extra transfers and ATM use beyond the allowance cost money |
| Revolut Business | Basic around £10; Grow around £35; Scale around £125 | Businesses with overseas clients and cards for staff | Multi-currency holding, company cards, tiered FX allowances | Not a licensed UK bank for these accounts; check safeguarding terms |
| NatWest Start Up | No monthly fee, inclusive everyday transactions for two years | Traditionalists who want a branch and a relationship manager | Branch access, FreeAgent included, multi-director access | Per-transaction charges start after the opening period; turnover and trading-age limits |
| Wise Business | No subscription; pay per transfer | Importers, exporters and freelancers paid in several currencies | Transparent conversion costs, local account details in multiple currencies | Not a full UK current account; no overdraft or interest |
| Airwallex | Entry plan waived above roughly £10,000 monthly deposits or balance | Online sellers and agencies with international supplier payments | Multi-currency, API access, bulk payments | Plan thresholds and transfer fees need checking against your volume |
Matching the account to the way you trade
A sole trader billing a handful of clients
Volume is low, so per-transaction charges barely register and app quality decides it. Starling and Monzo Business Lite both run at no monthly fee with unlimited standard UK transfers, which suits a sole trader bank account used for six invoices a month. Tide's entry plan is workable but its five included transfers run out quickly for anyone paying subcontractors. Priya, a freelance illustrator in Leeds, started on Tide, moved to Starling after her transfer allowance kept running dry, and now reconciles her books through a native Xero link in about ten minutes a month.
A limited company with staff, cards and receipts
Once there are two directors, a payroll run and employees claiming expenses, multi-user access and separate expense cards earn their fee. Monzo Business Pro at £5 covers extra users and virtual cards cheaply; ANNA Business bundles invoicing and late-payment chasing, which is worth £22.90 to a firm that spends Friday chasing debtors. Callum runs a small joinery in Sheffield and moved away from an app-only provider after realising his weekly cash deposits were costing more than a paid plan elsewhere. His advice: add up the deposit fees first, then compare subscriptions.
Anyone with revenue arriving in euros or dollars
A multi-currency business account changes the maths. Wise Business charges no subscription and takes a slice per conversion; Revolut Business bundles allowances into a monthly tier; Starling's euro account costs £2 a month for straightforward euro receipts. Adeola sells homeware from Manchester into the EU and Ireland, keeps a euro balance for supplier payments, and converts the rest when the rate is sensible rather than every Friday. She keeps Sterling with Starling and passes larger transfers through Wise.
Opening the account without losing a week
- Settle the legal structure first. A sole trader needs a Unique Taxpayer Reference; a limited company needs its Companies House number and details of every director with more than 25 per cent of shares.
- Have identification and proof of address ready for each signatory, plus a plain sentence describing what you sell. Underwriters read that line closely, and vagueness slows everything down.
- Confirm the deposit protection position and whether the provider is a licensed bank or an e-money firm.
- Check your cash route before applying, including the nearest Post Office or PayPoint counter.
- Apply for two accounts, not six. Run them in parallel for a month, then settle on one as the main account to keep bookkeeping sane.
- Connect accounting software at setup rather than in January.
- Keep records that satisfy Making Tax Digital from the first transaction, not the first deadline.
Practical support is free and local. Growth Hubs across England, Business Gateway in Scotland, Business Wales and Invest NI in Northern Ireland all advise on banking and finance without a sales pitch. The British Business Bank lists finance options for smaller firms, and Post Office counters handle cash deposits for several of the providers above.
An account you open this month will probably handle payroll, a VAT quarter and possibly a first overdraft request. Give it one afternoon of proper comparison, test the app yourself, and then get back to the work that actually pays.
研究の知恵