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Best Business Bank Account UK

The fintech revolution has transformed banking. First, it was personal banking customers who benefitted from the launch of app-based challenger banks. However quickly many products emerged for businesses and sole traders, that simplify the financial side of any business. We look at a range of different products to see which is the best business bank account UK.

Starling Bank Business

Starling Bank is hugely successful in the UK fintech sector, attracting millions to its personal banking services. The bank’s business offerings are also gaining traction, evidenced by the 460,000 business accounts opened by mid-2022. Their approach, which combines simplicity, affordability, and a wealth of digital features, resonates with a diverse customer base.

Key Features

  • Digital current account paired with a debit card
  • A range of handy tools in their Business Toolkit
  • Availability of USD and EUR accounts

Costs

  • Basic account: free
  • Business Toolkit: £7 per month
  • USD/EUR accounts: £2 per month each

Signup to Starling Bank Business

Revolut Business

Revolut is an app focused current account product that uses technology to give business customers a more modern experience, and their stated aim is the simplify and reduce the cost structure of various financial services that a company may need.

In addition, Revolut is an international company with a presence in many countries. With the rise in international business, especially with online businesses, there is often a need to transfer between currencies. Revolut allow transfers (up to certain monthly limits depending on account tier) between different currencies without fees and at the real exchange rate, which can be a very useful feature for many.

Key Features

  • Revolut business accounts can be opened by companies in over 48 countries, including the USA, the UK and the EU.
  • Very good for businesses who operate in multiple currencies.

Costs

The monthly costs for the various account tiers are:

  • Free – Free
  • Grow – £25 per month
  • Scale – £100 per month

Enterprise – the costs of the Enterprise tier depend on which features you add.

There are also some other costs for various functions:

  • Local payments – outside of the allowance on each tier, there is a charge of £0.20 per payment
  • International payments – outside of the allowance on each tier, there is a charge of £3.00 per transfer.

Signup to Revolut Business

Tide

Tide focuses exclusively on business accounts without offering personal online banking services. Since launching in 2017, their straightforward and adaptable digital banking solution has attracted hundreds of thousands of business clients.

Key Features

  • Business current account with a debit card
  • Direct integration with accounting software
  • Capability to send invoices directly from the app

Costs

  • Tide Free: No cost
  • Tide Plus: £9.99 (excluding VAT) per month
  • Tide Cashback: £49.99 (excluding VAT) per month

Signup to Tide

Monzo Business

Monzo, a leading figure in digital personal banking, has successfully extended its expertise into the business sector. Since launching its business product, Monzo has quickly amassed 50,000 customers within the first six months and continued to attract hundreds of thousands more. They deliver the same smooth, efficient app-based banking experience to business users.

Key Features

  • Integration with accounting software within the app
  • Features for creating dedicated pots for tax and VAT to manage liabilities
  • Currency transfers facilitated through Wise

Costs

  • A no-cost basic tier, with an enhanced Pro tier available for £5 per month.

Sign up to Monzo Business

Wise Business

Previously operating under the name Transferwise, Wise is an e-money provider that automatically offers a multi-currency bank account to all its customers, making it an excellent option for businesses engaged in cross-border transactions and handling multiple currencies. They also provide a debit card and additional banking functionalities.

Key Features

  • Multi-currency account available to all customers
  • Local banking details available in 10 different currencies
  • Currency transfers at interbank rates

Costs

  • Free business bank account – however, there are fees for ATM withdrawals, currency transfers, and other services.

Signup to Wise

What Is A Business bank Account?

Business banking shares many similarities with personal banking, yet it incorporates specific features tailored to business operations. The UK has seen a significant increase in sole traders and small businesses recently, driven by shifts in the economy and the rise of people managing multiple jobs or side projects. Since 2000, the number of businesses in the UK has nearly doubled, indicative of major changes in the economic landscape and working patterns.

Having a business bank account is essential for any company, big or small. It helps business owners keep their personal finances distinct from their business operations, which is invaluable for accurate and straightforward accounting. While business banking functions similarly to personal banking, the key benefit lies in the clear financial separation it provides between personal and business finances.

What is the difference between a business and personal bank account?

While the foundational operations remain similar, the best business bank accounts often include specialized features aimed at supporting business activities that are different from a personal account, such as:

  • The ability to send invoices directly from the banking app to clients.
  • Integration between the banking app and accounting software for streamlined financial management.

Furthermore, the fee structure for business current accounts can differ from personal accounts due to the higher volume of transactions typically handled by businesses. For instance, some business accounts, like those offered by Tide, might charge a small transaction fees.

However, the importance of keeping your personal and business income apart is the biggest reason to have a separate business bank account.

Business banks for sole traders

As a sole trader, you aren’t legally required to have a separate bank account for your business, but it’s highly advisable to do so.

Submitting annual accounts is a requirement for businesses, and having a dedicated business bank account simplifies this process. Instead of combing through personal transactions to identify business-related ones, you can easily review your business account.

With more than 3 million sole traders in the UK, business banking providers are keenly competing to offer features that simplify the financial management for sole traders, making their banking experience as straightforward as possible.

Digital banks or high street banks?

Digital banks have revolutionized the UK banking scene, appealing to both personal and business customers with their ease of setup, low costs, and mobile-first approach.

In contrast, traditional high street banks can sometimes pose challenges due to higher costs, less advanced technology, and more cumbersome processes. However, there are situations where a high street bank might be the better choice:

Cash Deposits – While most digital banks support cash deposits, they usually charge per deposit and impose limits on the amount you can deposit. If your business frequently handles cash, a high street bank could be more practical.

Branches – Unlike digital banks, traditional banks have physical branches. This can be crucial if issues arise; despite digital banks often being efficient, there are cases where businesses face prolonged freezes on their accounts, leading to significant disruptions. The option to visit a branch and speak directly with someone can be a significant advantage.

How to choose a business bank

If you’re considering choosing a digital bank for your business, there are several factors to evaluate:

Costs – Many digital banks implement monthly fees, and some may charge for each payment made or received. It’s important to carefully review each bank’s fee structure to understand how it might impact your business financially from month to month.

Features – While digital banks generally offer similar types of features, the specifics of how these features are implemented can vary. Assess your business’s needs and determine which bank’s offerings align best with how you operate.

International Operations – If your business frequently deals with international customers, makes payments overseas, or handles multiple currencies, then choosing the right bank is crucial. Banks like Wise are well-suited for handling international transactions, whereas others like Tide may focus more on UK-based services.

Are business banks safe?

Business banks are generally safe, as they will be regulated in the UK by the Financial Conduct Authority (FCA), either as a licensed bank, in the case of Starling Bank and Monzo, or as an e-money institution, in the case of Wise and Tide. In addition, customer deposits are covered under the Financial Services Compensation Scheme (FSCS) automatically by Starling and Monzo, and also by Tide via their partner Clearbank. Customer deposits are not covered with the FSCS with Wise.

What do I need to open a business bank account?

Typically, you’ll need to provide information about your business and yourself, including proof of identity. Most banks accommodate various business structures, including sole traders, limited companies, and LLCs.

It’s important to note that many banks may not service businesses in industries they consider ‘high-risk,’ such as adult entertainment, gambling, or cryptocurrency. Banks usually list these excluded industries on their websites, so reviewing this information before applying is advisable.

*Please note: This article may include affiliate links. If you purchase through these links, we may earn a commission at no extra cost to you. This helps support our work and allows us to continue providing content like this.

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