Why UK founders have moved banking onto their phones
The UK has one of the busiest digital banking markets in Europe, and business customers have done most of the moving. Starling alone reports more than 500,000 business accounts, while Monzo puts its figure above 400,000. Neither charges a monthly fee for its basic business account, which is a large part of the appeal.
That shift has changed what people expect from a bank. Instant notifications, VAT pots, and a debit card you can freeze from an app are now baseline features, not extras. Eligibility rules have loosened too. Most providers accept UK-registered sole traders and limited companies, with directors who live in the UK and hold a UK tax residency.
The friction has moved elsewhere. Getting through onboarding is the first hurdle: you need proof of business activity, a matching bank statement, and often a document listing shareholders. Cash handling is the second, because digital banks rarely own a branch network and lean on the Post Office instead. Accounting is the third, since Making Tax Digital now pushes quarterly updates onto sole traders as well as companies.
What each provider really charges
Fees are where the differences show up. A free plan usually means fewer free transfers, a fee on cash paid in, or a charge for extra cards. The table below reflects published pricing from the providers themselves.
| Provider | Monthly fee | Best suited to | Cash deposits | International payments | Watch-outs |
|---|
| Starling Bank | £0 for the GBP account; toolkit £7, EUR £2, USD £5 | Sole traders and limited companies wanting one app for banking and bookkeeping | 0.7% at the Post Office, £3 minimum | From £0.30 on local networks, £5.50 SWIFT, 0.4% conversion | No branch network; overdraft subject to eligibility |
| Monzo Business | Lite £0, Pro £5 | Very small companies that want pots, invoicing and tax setting aside | £1 per deposit at PayPoints and Post Offices | Available on both plans, fees apply | Built for sole traders and single-director companies |
| Tide | Free, Smart £12.49, Pro £27.49 | Businesses that want cheap card payments and invoicing in one place | Supported, with plan limits | 2.75% FX on Free, 0% on paid plans | Not a bank itself; deposits held with a partner bank under FSCS rules |
| ANNA Money | Pay as you go £0, Business £14.90 plus VAT, Big Business £49.90 plus VAT | Owners who want invoicing and tax reminders handled automatically | Available, plan limits apply | Free allowances, then £5 plus a conversion fee | 0.95% on incoming payments on the entry plan |
| Countingup | £3, £9 or £18 based on monthly deposits | Sole traders and companies with up to two directors | 0.5% to 3% depending on method | 3% foreign transaction fee | Tiered by how much money flows through the account |
| Revolut Business | Basic £10, Grow £35, Scale £125 | Companies paying suppliers in several currencies | Limited cash support | Allowance at the interbank rate, then a markup | Priced for card-heavy and cross-border work |
| HSBC Kinetic | £0 | Sole traders and single-director companies with turnover up to £6.5m | Branch and Post Office options | Over 200 countries, fees apply | No multi-user access |
| Lloyds Business | £0 for 12 months, then £10 | First-time business account holders who want a branch nearby | £0.85 per £100 at deposit machines, £1.60 over the counter | Fees apply per transaction | Monthly fee returns after the introductory period |
Two things stand out. First, "free" rarely covers cash. Starling's 0.7% Post Office fee and Lloyds' per-hundred charge both bite harder as takings grow. Second, paid plans are usually bought for two reasons: removing FX fees and unlocking accounting connections.
Matching the account to how your business earns
A freelance illustrator in Manchester billing two clients a month does not need a £27 monthly plan. A free business bank account UK founders use for exactly this case, such as Monzo Lite or Starling's GBP account, handles invoices, direct debits and tax pots without a subscription. The trick is to ignore the upgrade prompt until the feature you actually need appears.
Limited companies with staff have a different set of needs. Payroll runs, multiple cardholders, and an accountant who wants read-only access all point toward accounts with user permissions. Monzo Pro and Starling both support multi-user access, and Tide's Smart plan adds a second business current account for separating projects. A limited company bank account with accounting software connections saves real hours at year end, particularly if your bookkeeper already works in Xero or QuickBooks.
Then there is the cross-border case. A Leicester-based importer buying components from Poland and Vietnam will lose more on currency conversion than on any monthly fee. A multi-currency business account UK providers such as Revolut and Starling offer keeps balances in euros and dollars, so supplier invoices do not trigger a conversion each time. Compare the allowance before the markup applies, not just the headline rate. Revolut's Basic plan includes a £1,000 exchange allowance at the interbank rate, which suits a small operation but not a busy importer.
One pattern I keep hearing from owners who switched: the first month feels unfamiliar, then the reporting becomes the reason they stay. A Sheffield plumbing firm moved from a branch account to Starling and cut its bookkeeping time by sending receipts straight into the app. A design studio in Bristol chose ANNA for tax reminders after two late self-assessment filings. Neither outcome came from a clever feature. Both came from removing a manual step.
Five checks before you press apply
Start with eligibility, not features. Sole traders need proof of trading; limited companies need incorporation details and director information. Some providers only accept single-director companies, so read that line before you fill the form.
Model your cash flow, not your balance. If customers pay in notes, weigh the deposit fee against the monthly saving. At £3,000 a month in cash, Starling's Post Office fee works out cheaper than a paid plan with cash included, but only just.
Look at what the switch service moves. The Current Account Switch Service transfers direct debits, standing orders and payees, and redirects incoming payments. Overdrafts do not travel with it. Arrange repayment with your old bank first.
Check the protection behind the brand. Most of these accounts sit under the Financial Services Compensation Scheme on eligible deposits, but the legal entity holding your money matters. Tide, for example, is a service company rather than a licensed bank, with accounts provided by a partner bank.
Test support before you need it. Ask one question through the app chat during onboarding. Response times at that stage tell you more than any review score.
Local help worth using
Business support in the UK is patchier than the marketing suggests, but the free stuff is genuinely useful. Business Growth Hub in Manchester runs clinics on finance readiness. Business Wales and Scottish Enterprise both offer start-up advice that covers banking setup. Chambers of Commerce in Leeds, Birmingham and Glasgow host regular networking events where you can ask another owner what they use. For cash deposits, the Post Office counter network is the practical answer for most app-based accounts.
Pick one account you can open this week, run it for a quarter, then compare the fees on your statement against the plan you are paying for. That single review often settles the question better than any comparison table.
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