Why the choice feels harder than it should
The UK has one of the most crowded business banking markets in Europe. Starling, Monzo, Tide, Revolut and Wise all let a sole trader or a limited company apply in minutes, and the high street banks have spent the same period cutting branch networks and pushing customers toward apps. That competition is good news, yet it creates a specific kind of confusion: five providers, five pricing models, and no obvious way to compare them.
Three problems come up again and again.
Eligibility is narrower than the marketing suggests. Most app-based accounts accept UK sole traders and limited company directors. Partnerships, LLPs, community interest companies and charities are often excluded, and Starling is one of the few that openly accepts LLPs. A quick eligibility read before you start saves a rejected application on your credit file.
Cash still matters in a mostly digital market. Market traders, cafés, barbers, taxi firms and tradespeople take notes and coins every week. Post Office deposits typically cost around 0.7% of the amount paid in, with a minimum charge of a few pounds, so an account built for card payments can quietly become expensive for a cash-heavy business.
Tax admin changed shape. Since April this year, sole traders and landlords with qualifying income above £50,000 have had to keep digital records and send quarterly updates to HMRC under Making Tax Digital for Income Tax. A bank feed into Xero, QuickBooks or FreeAgent is no longer a nice extra. It is the difference between a clean quarter and a weekend of spreadsheet repair.
Add the everyday frictions. A director who wants their co-founder to see the balance. An e-commerce seller paying suppliers in euros. A limited company that needs to deposit takings on a Saturday.
What you actually get, side by side
| Provider and plan | Monthly cost | Suits | Included | Watch-outs | Deposit protection |
|---|
| Starling Business | £0 | Sole traders, limited companies, LLPs | UK payments at no charge, invoicing, MTD-ready accounting software, up to five expense cards, multi-director access | Post Office cash deposits cost 0.7% (minimum £3); third parties such as accountants get view-only access only | FSCS up to £120,000 |
| Monzo Business Lite and Pro | £0 on Lite, £5 on Pro | Solo founders and service businesses | Tax pots, accounting integration, virtual cards and invoicing on the paid tier | Cash paid in at PayPoints or Post Office costs £1; several tools sit behind the Pro plan | FSCS up to £120,000 |
| Tide Free and paid tiers | £0 to roughly £12.49–£69.99 | Start-ups that want invoicing built in | Invoicing, Sage and Xero feeds, team cards on higher tiers | Entry tier allows five transfers a month then 20p each, caps invoicing at three a month, and charges 2.75% on overseas card use; no overdraft | FSCS up to £120,000 on accounts held with ClearBank |
| Revolut Business Basic, Grow, Scale | £10, £35 monthly on Grow, or about £30 on annual billing | Importers, exporters, agencies with several currencies | Multi-currency balances, team cards, payment links, API access | Plan allowances run out and per-item charges begin; the UK banking entity is now authorised as a bank, but not all business customers have been moved across yet | Up to £120,000 where funds sit with the UK bank |
| Wise Business | One-off setup fee | Contractors and freelancers paid from abroad | Multi-currency balances, transfers at the mid-market rate | It is not a current account with a full UK banking service behind it, and balances are safeguarded rather than covered by the deposit scheme | Safeguarded, not FSCS |
| High street bank business account | Often a monthly fee | Cash-heavy businesses needing a branch and lending | Branch access, coin and note handling, overdrafts and loans | Slower onboarding, credit checks, and per-item charges for things app banks include | FSCS up to £120,000 |
Prices move, and plan names get refreshed. Treat the figures above as a starting map, then confirm on the provider's own page before you apply.
Matching the account to the business
An example worth following: Priya runs a one-person design studio in Manchester as a sole trader. Her income crosses the £50,000 line, so quarterly updates are now part of her routine. Her old high street account charged a monthly fee and gave her a statement she had to export by hand. Moving to an account with a direct feed into her accounting software cut a monthly chore down to a ten-minute check, and the £0 monthly charge left more room for her software subscription.
Tom and Ellie took the opposite route. Their coffee van in Bristol banks several hundred pounds in cash most weekends. A phone-only account looked attractive until they costed the Post Office deposits at 0.7%. They kept a branch-based account for cash handling and opened a second app-based account for card takings and supplier payments, splitting the job between the two.
Daniel, who sells bike parts online from Leeds, pays two European suppliers each month. On his previous account, each payment carried a fixed charge plus a currency markup. A multi-currency account with a monthly allowance brought the cost down and made the exchange rate visible before he confirmed the transfer.
The pattern: no single provider wins on every measure. Choose by transaction mix, not by app design.
A short checklist before you apply
- Confirm you qualify. Read the eligibility page for the legal structure you actually trade under, not the one in the advert.
- Count your transactions. Cash deposits per week, overseas payments per month, number of team members who need access. Then test each provider's allowance against those numbers.
- Check who holds your money. A bank authorisation and deposit protection are different from an e-money safeguarding arrangement. The provider's terms name the entity you are contracting with.
- Line up documents. Photo ID, proof of business address, Companies House details for a limited company, VAT registration if relevant. Directors and people with significant control now verify identity through Companies House, so do that first.
- Plan the switch. The Current Account Switch Service covers business accounts and moves incoming payments and payers across, but update HMRC, payroll and your card processor separately.
- Wire up the software on day one. Connect your accounting tool and set up a tax pot or Space so VAT and corporation tax are ring-fenced before they are spent.
Useful local resources: the HMRC list of MTD-compatible software, the FSCS checker, and the Current Account Switch Service guarantee.
Where to go from here
Start with two numbers: your cash deposits per month and your overseas payments per month. Those two figures eliminate more accounts than any feature comparison will. Then run one week on a trial basis with a small transfer in and out, so you see how long payments actually take before your first payroll or supplier deadline depends on it.
If your income now sits above the £50,000 threshold, weigh the accounting integration as heavily as the monthly fee. A £0 account that leaves you rebuilding records four times a year is the more expensive option.
And if you are still trading as a sole trader while considering incorporation, open the conversation with your accountant before you open the account. The legal structure decides which providers will even accept you, and switching later means moving payers, Direct Debits and software connections all over again.
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