Business Bank Accounts in the UK: How to Choose the Right One for Your Company

Whether you’re launching a side hustle, setting up a limited company, or expanding a growing enterprise, a business bank account is essential for managing your finances professionally and staying HMRC-compliant.

But with dozens of options in the UK—ranging from traditional high street banks to agile fintech firms—how do you pick the best account for your needs?

This guide walks you through the top business bank accounts in the UK, who needs one, how to open it, and what features to look for in 2025.

Do You Need a Business Bank Account?

Sole Traders

If you’re a sole trader, you are not legally required to have a business bank account. However, it’s strongly recommended to separate personal and business finances to:

• Track income and expenses clearly

• Simplify tax returns and VAT submissions

• Maintain professionalism with clients

Limited Companies

If you’re running a limited company, a separate business account is a legal requirement. Your company is its own legal entity, so its finances must be distinct from your personal funds.

What to Look for in a Business Bank Account

Best Business Bank Accounts in the UK (2025)

Here’s a comparison of the most competitive and reliable options available today. All accounts are suitable for UK-based businesses and support digital access.

Note: All providers listed above are regulated by the Financial Conduct Authority (FCA).

Best All-Rounder: Starling Business Account

Why we like it:
Starling combines zero fees with powerful app features and real-time support. It’s ideal for freelancers and SMEs who want modern banking with no nonsense.

Highlights:

• Instant transaction notifications

• Free UK bank transfers

• Cash deposits via Post Office

• Integrates with Xero, FreeAgent, QuickBooks

• Free Euro account add-on

👉 Starling Business Bank Account

Best for Startups: NatWest Start-up Account

Why we like it:
With 24 months of no monthly fees and FreeAgent accounting software included, NatWest’s Start-up account is ideal for newly registered limited companies.

Highlights:

• 24 months free banking

• No minimum turnover requirement

• Dedicated business advice and tools

• Online, mobile, and telephone banking

Best for International Payments: Revolut Business

Why we like it:
Revolut is built for modern, global businesses. It supports multi-currency accounts, bulk payments, and spending analytics in one sleek app.

Highlights:

• Hold and exchange 25+ currencies

• API access for automated payments

• Expense tracking and team cards

• Works globally, fast setup

⚠️ Not FSCS-protected — avoid large balances.

Best Traditional Bank Option: Lloyds Business Account

Why we like it:
For businesses that still need in-branch support, cheque services, or physical banking, Lloyds offers a great balance of digital and traditional features.

Highlights:

• 100 free transactions/month

• Optional business overdraft

• Access to high street branches

• Includes accounting trial

Business Account Fees Explained

Even with digital providers, watch out for:

• Exceeding free transaction limits

• Foreign transaction charges

• Cash handling fees

• CHAPS or faster payment fees (some banks)

• Monthly fees after introductory period ends

Always review the tariff documentation before applying.

How to Open a Business Bank Account

1. Choose the right provider based on your business type

2. Prepare required documents:

   • Certificate of incorporation (Ltd)

   • Proof of ID and UK address

   • Business plan or revenue projections (some banks)

3. Apply online or in-branch

4. Wait for verification (can take 1–5 working days)

5. Receive your account number, sort code, and card

Can You Switch Business Accounts Easily?

Yes. Many UK banks participate in the Current Account Switch Service (CASS), which transfers your payments, direct debits, and balance automatically within 7 working days.

This makes switching to a better deal seamless—just be sure your new account supports business-level switching, not all do.

Do Business Accounts Include Overdrafts or Credit?

Some accounts offer:

• Business overdrafts (usually require approval)

• Business loans

• Credit cards linked to the account

• Invoice financing for cash flow boosts

High street banks like Barclays, HSBC, and Lloyds are more likely to offer these credit tools. App-based banks tend to focus on deposit-only accounts.

Are Business Bank Accounts Protected?

Yes. Most UK-regulated business accounts are covered under the Financial Services Compensation Scheme (FSCS) up to £85,000.

However, Revolut Business and Wise Business are not FSCS-protected as they operate under e-money licences, not full UK banking licences. Your funds are safeguarded, but not insured.

Can Sole Traders Use Personal Bank Accounts?

Technically yes, but it’s discouraged. Personal accounts:

• Often violate terms when used for business

• Are harder to audit at tax time

• Blur personal and professional income

Using a proper business account will simplify HMRC returns and maintain your company’s professional image.

Final Thoughts: Which Business Account Should You Choose?

• ✅ Best overall: Starling – great features, no fees

• ✅ Best for startups: NatWest Start-up or HSBC Kinetic

• ✅ Best for global teams: Revolut Business

• ✅ Best for cash handling: Lloyds or TSB

• ✅ Best for app experience: Monzo or Starling

Choosing the right account depends on how your business earns and spends. Don’t settle for the first offer—compare regularly and switch if you’re paying more than you need to.

Useful Resources

• Starling Business Account

• NatWest Start-up Account

• Revolut Business

• Lloyds Business Account

• FSCS Coverage for Business Accounts