While you’re not legally required to open a business bank account as a sole trader, its a useful way to keep your business and personal finances separate.
This makes things easier when it comes to tracking expenses and submitting taxes, and presents a more professional image when invoicing clients.
So, which business account is the best for sole traders? Make sure to compare costs, free banking periods (if there is one), overdrafts and integrations.
Here we investigate the best business bank accounts on the market for sole traders.
Compare business bank accounts now – Easily find the top business bank accounts from a range of providers here.
Digital banking platforms
Newer players to the game have their own products which are generally quicker and easier to set up and are operated online.
ProviderPricing
HSBC Small Business Banking Account Always free (transaction fees apply)
Revolut BusinessBasic: £10 per monthGrow: £30 per monthScale: £90 per monthEnterprise: BespokeRevolut Pro for freelancers: £0-£45 per month
TideFree (£0 per month)Smart (£12.49 per month plus VAT)Pro (£24.99 per month plus VAT)Max (£69.99 per month plus VAT)
Countingup£3 a month for businesses with monthly deposits of £0-£750; £9 a month for businesses with monthly deposits of £750 to £7,500; and £18 a month for unlimited deposits
Equals MoneyBusiness Tier (£250 per year)Business Plus Tier (£350 per year)Enterprise Tier (Custom)
ANNA MoneyPay As You Go (£0 per month)Business (£22.90 per month plus VAT)
Zempler BankGo: £0 per monthExtra: £9 per monthPro £19 per month
Starling BankOriginal free account (£0 per month)Business Toolkit (£7 per month including VAT)
CoconutEssentials: £16.99 per month/£99.99 per year paid annually+MTD: £21.99 per month/£129.99 per year paid annually+Self Assessment: £129.99 per year paid annually (no pay monthly optionFull: £159.99 per year paid annually (no pay monthly option
MonzoLite: £0Pro £9 per monthTeam: From £25 per month
AmaizBusiness (£0 per month – VAT may apply)Free onboardingBusiness+ (£49 a month – VAT may apply) £100 onboarding feeEnterprise (£99 a month – VAT may apply) £250-£1,000 onboarding fee
MettleMettle (£0 per month)
HSBC
Small Business Banking Account – No monthly fee
The HSBC Small Business Banking Account is a more traditional small business bank account from HSBC, aimed at sole traders and limited companies with turnover of up to £6.5m.
No monthly fees
Borrowing solutions of up to £100K
Arranged overdraft
Visa commercial card – no annual fee for the first year (then £32)
Access to free and secure digital banking including the ability to scan and deposit your cheques via the Business Banking Mobile app
Syncs with Sage accounting software
International payments for over 60 currencies
Tide
With Tide, there are four different account options geared at sole traders and freelancers that can scale with your business.
Packages
Free (£0)
Accounting integrations including QuickBooks, Xero, Quickbooks, Xero, Sage and more
Send payment links in seconds
Create and send invoices for free (monthly limits apply)
Five free transfers
Smart (£12.49 per month plus VAT)
All of the features of Free, and:
One free expense card for your team
30 free transfers a month
Enhanced access for one additional team member
Pro (£24.99 per month plus VAT)
All of the features of Pro, and:
Unlimited transfers in and out
Two free expense cards included
Enhanced access for two additional team members
Max (£69.99 per month plus VAT)
All of the features of Plus, and:
Three free expense cards
Access for five team members
Dedicated team of account managers
Get started with Tide
CountingUp
Countingup is a relatively new player in the mobile banking market.
Its business offering comes with automated bookkeeping, business insights, professional invoices and automated receipt scanning as key features along with tax calculated and filed for you.
Note that Countingup doesn’t have an IBAN for international payments but you can apply for one with their partner, CurrencyFair.
All accounting features appear in all of the accounts; these include receipt capture and tax estimate.
A three-month free trial is offered, then its pricing structure is as follow:
£3 a month if you deposit up to £750
£9 a month if you deposit between £750 and £7,500
£18 a month unlimited deposits
However, the self-employed can only keep up to £60,000 in their account, while limited company accounts are capped at £400,000.
Get started with CountingUp
Equals Money
Pitching itself as a “business bank account alternative”, Equals Money combines a multi-currency account with a business platform and expense cards.
It’s a particularly good option for sole traders with an overseas presence – its expense card are compatible with 21 currencies and can be used in over 190 countries, while you can use your multi-currency IBAN to send and receive money in 38 currencies. And you can track all your revenue and spend in real-time using the business platform.
Pricing
Business Tier (£250 per year)
Issue up to 20 physical (£10 each) and 50 virtual cards (free)
Business Plus Tier (£350 per year)
Issue up to 50 physical (£10 each) and 100 virtual cards (free)
Enterprise Tier (Custom)
Issue more than 50 physical (custom fees) and more than 100 virtual cards
Get started with Equals Money
ANNA Money
ANNA Money is open to any UK resident who is a sole trader.
It takes three minutes to set up and you’ll get a personal webpage with a link to put on your online profiles or to send to someone directly. You can give your employees their own debit card with a spending limit and it’ll sort out their expenses automatically. It also has a receipt capture feature that ANNA automatically categorises and stores digitally.
You can set up free direct debits as well as scheduled and recurring payments.
There are two packages suitable for sole traders, the free Pay As You Go option and the Business plan (£22.90/month), which includes essentials like local transfers and expenses cards. A Big Business package is also available for £59.90/month + VAT with unlimited local transfers and ATM withdrawals. See full prices here.
Packages
Pay as you go (£0 per month)
Free card in any country and currency
1 per cent currency conversion fee
20p per local transfer in and out of your account
Business (£22.90 per month plus VAT – first month free)
Pay in cash with one per cent commission
60 free local transfers
Up to five debit cards included, then £3 per card per month
Taxes add-on (£29 per month plus VAT – first month free)
Tax calculation and filing, auto-bookkeeping and expert tax support
Open an Anna Money business account
Zempler Bank
Zempler Bank aims to provide simple and accessible banking with straightforward pricing structures. Business bank accounts are open to sole traders alongside other types of business. You just need to be a UK-based sole trader or freelancer and not be registered with Companies House.
Zempler Banks has two business bank accounts:
Go (£0)
Deposit money into any Post Office branch
Add up to 20 additional expense cards
Set money aside with Pots feature
Fees apply on cash withdrawals, deposits, and other transactions
Extra (£9 a month)
All of the features of Go, plus:
20 free payments and transfers per month
Business Creditbuilder
0.5 per cent cashback
In-app messaging
Business Pro (£19 a month)
All the features of Extra, plus:
1% cashback on card spend
500 free payments and transfers every month
1% interest earning savings pot
Open a Zempler business account
Starling Bank
The Starling Bank business account is open to sole traders and others. There’s no monthly charge on the account and it comes with an overdraft, automated business spending categorisation, card security controls, and free UK bank transfers and ATM withdrawals. You can make international payments to bank accounts in 34 countries.
To boost your business’ functionality, you can opt for the Business Toolkit for £7 a month. You can deposit cash at the Post Office for a 0.7% (£3 minimum) fee.
Packages
Original free account (£0)
Connect to Quickbooks, Xero or FreeAgent
24/7 UK support
Free UK bank transfers
Business Toolkit (£7 per month including VAT)
Everything in the Original free account, and:
Invoices and auto-matching
Tax estimation (for sole traders only)
Making Tax Digital compliant VAT submission
Coconut
Coconut is geared specifically at sole traders but is open to limited companies too. It has the functionality to handle banking, bookkeeping, invoicing and tax. Sole traders can an extra help up with tax reports to help them with their self-assessment.
Features include:
30-day free trial
Sole traders can add their personal account on to their business bank account to separate into personal and business finances
Connect current accounts and credit cards from 30+ different banks including Barclays, Lloyds and Starling
Notifications when payment has been made or received, automatic categorisation
See calculations of how much tax you’ll owe and tips on what expenses you can claim
Plans
Essentials: £16.99 per month/£99.99 per year paid annually
+MTD: £21.99 per month/£129.99 per year paid annually
+Self Assessment: £129.99 per year paid annually (no pay monthly option
Full: £159.99 per year paid annually (no pay monthly option)
Monzo
Monzo has a couple of low-cost options that are great for sole traders. The always free option is a great starting point. Features are limited, but it does include free UK bank transfers, cash and cheque deposits, access to making tax digital software, and instant access savings pots.
The Pro account adds invoicing, virtual cards, integrated accounting, connected accounts and more
Packages
Lite (£0)
Free UK bank transfers
Deposits
MTD software
Pro (£9 per month)
Everything in Lite, and:
Invoicing
Virtual cards
Connected accounts
Amaiz
With Amaiz, your account is protected by smart security features including biometric verification, transaction monitoring and fraud detection. Plus, you can make payouts in more than 70 currencies and customise your banking statements. Instant invoices and payments will make your finances easier to handle too.
Packages
Business (£0 a month – VAT may apply)
Business+ (£49 a month – VAT may apply)
Enterprise (£99 a month – VAT may apply)
£250-£1,000 onboarding fee
Mettle
Mettle (an independent arm of NatWest) is a free business bank account that’s ideal for sole traders. You’re eligible as long as you maintain a balance of less than £1 million.
Features include tax pots, 0.9% AER on savings from as little as £10, customisable invoice templates and free accounting software (FreeAgent).
Package
Mettle (£0)
Match payments to invoices
Easily categorise your transactions
Set aside a set percentage each month to put towards tax with Tax Pots
FSCS protected
Get FreeAgent free of charge, saving you £150 a year
Traditional banks
High street banks offer accounts that are suitable for sole traders. Many have a free banking period, which is a huge bonus if your business is new and you’re trying to cut costs. Take a look at the summary below.
TSB
TSB’s Business Plus account has 30 months of free business banking for sole traders, partners and directors. It doesn’t matter if you’re switching or are opening a brand-new bank account.
Package
Business Plus Account (30 months free, £5 thereafter)
Deposit cash and cheques in Post Office branches as well as TSB branches
Free specialist business advice for 12 months
Take payments with a smartphone
Fees apply on some transactions
Co-op Bank
The Co-operative Bank offers the Business Current Account, which is ideal for sole traders who don’t often bank with cash or cheques.
Package
Business Bank Account (No account fee)
Partnership service offerings include insurance, sustainability tools, merchant services, HR tools and tech support
Payment app, Go Get Paid, lets you automate your financial admin
Exclusive payment and commerce benefits from Clover
Free support tools such as webinars and start-up guides
Barclays
Barclays Business Current Account is the bank’s best offering for sole traders.
Package
Business Current Account (Free for 12 months, £8.50 a month thereafter)
Free invoicing and account software from FreshBooks, worth £260 a year
Expert advice from Barclays’ Business Eagle Labs
Pay in cheques using the Barclays app
Fraud protection 24 hours a day
Metro Bank
Metro Bank has a simple Business Bank Account open to sole traders with under £2m turnover.
Package
Business Bank Account (£8 a month; free if your balance stays above £6,000)
Local Business Manager as a key point of contact, but all colleagues can support you with day-to-day banking
Store opening 6 days a week
Transaction and service charges apply
Virgin Money
The Virgin Money M Account is designed for businesses with less than £1m in turnover. There’s no monthly charge on the account. However, there will be a 95p charge for manual debit and credit payments – that is, transactions you have to do in-store.
Package
M Account (£0)
Cash cheques digitally
Use with Apple Pay and Google PaySet up weekly balance and transaction alerts as you like
Xero free for six months
Can I use a personal account as a sole trader?
In some cases you can, but it is helpful to have a business bank account for a number of reasons. It’ll be easier to split your business and personal expenses, for starters.
Business bank accounts have greater functionality such as cashing cheques into your account and it’s easier to manage expenses and do your tax return.
A business bank account will build a credit rating for your business so that you can access loans and other financing that you may need later down the line.
Bear in mind as well that some banks simply won’t let you have a personal account for your banking, even if you’re a sole trader. They might even close your account if they cotton on that you’re using your personal account for your business.
The best part? Business bank accounts often offer handy freebies like free accounting software or a free 12 months of banking, for example.
Get a business bank account quote today – click here.
More on being a sole trader
Employing people as a sole trader – Once you get going as a sole trader you can employ people just as you would do in a limited company, but you have to tell HMRC that you are doing so.
What is a sole trader? – A small business guide
Important Information – Some of the products promoted are from our banking and affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
