Compare Business Bank Accounts in the UK

Business bank accounts at a glance

A business bank account keeps your business income and spending separate from your personal money. Here are the key facts for UK businesses in 2026:

• Limited companies need one in the company's name. Sole traders don't legally, but Making Tax Digital now makes a separate account far more practical.

• Compare the full cost, not just the monthly fee. Transfer charges, cash deposit fees and currency conversion often cost more over a year.

• Not every account is a bank account. Bank deposits are protected by the FSCS up to £120,000; e-money accounts are safeguarded instead.

• Small businesses can be refunded for scams. Businesses with fewer than 10 employees are covered by the rules that make banks refund victims of authorised push payment (APP) scams, up to £85,000 per claim.

• Switching takes 7 working days through the Current Account Switch Service, for businesses with fewer than 50 employees and turnover under £6.5 million.

Business bank accounts compared

Key details checked on 19 October 2026. Fees and offers can change, so always check with the provider before applying.

Do you need a business bank account?

If you run a limited company or LLP, yes: the business is a separate legal entity, so its money must be held in an account in its own name. Sole traders and partnerships aren't legally required to have one, but most benefit from it.

A business bank account is an account used to receive payments from customers, pay suppliers and staff, and manage Direct Debits, kept separate from your personal finances. Many also include invoicing, accounting integrations, expense cards and multi-currency payments.

Why sole traders increasingly need one. Some banks' personal account terms don't allow business use. A separate account also makes it easier to track income and expenses for tax, which now matters more because of Making Tax Digital (see below).

Do sole traders need a separate account for Making Tax Digital?

Not by law, but it makes Making Tax Digital for Income Tax much easier. Under MTD, sole traders and landlords must keep digital records and send HMRC quarterly updates using compatible software. The rules are being phased in by income:

A business account that connects to MTD-compatible software feeds your transactions in automatically, so you only need to categorise them. Mixing personal and business payments in one account means sorting every transaction by hand each quarter.

How much does a business bank account really cost?

The real cost of a business bank account depends on how your business pays and gets paid. For many businesses, transaction fees, cash deposit charges and currency conversion cost more than the monthly fee. Here is what typical charges add up to over a year for three types of business:

Illustrative fees, not those of a specific provider. Check each account's price list against how your business actually uses it.

Paid plans. Monthly plans from around £10 to £25 often include more free transfers, cards or software. Add up what the extras would save you on your own usage: if it's less than the plan's yearly cost, the free plan is cheaper.

VAT on fees. Some providers quote fees excluding VAT. If your business isn't VAT-registered, you can't reclaim it, so add 20% when comparing.

Which business bank account suits your type of business?

Most UK businesses can open a business bank account, but each provider decides which business structures, industries and owners it accepts. Check eligibility before you apply, as a rejected application can delay getting paid.

• Sole traders and freelancers: many accounts are built for the self-employed, with simple payments, tax pots and MTD-ready bookkeeping.

• Limited companies: providers will ask for Companies House details and information on directors and people with significant control.

• Startups and small businesses: most digital providers accept businesses with no trading history, and some include invoicing and accounting tools.

• Partnerships: accepted by many providers, but not all support every partnership structure, so checks vary more.

• Businesses with a poor credit history: a low credit score doesn't always stop you opening an account, especially one without an overdraft.

Is your business's money protected?

It depends on who holds it. Business deposits with a UK-authorised bank are protected by the FSCS up to £120,000 per eligible depositor, per banking licence. Money held by an electronic money institution (EMI) isn't covered by the FSCS but must be safeguarded.

Bank or e-money provider? Many app-based business accounts are run by EMIs or payment institutions rather than banks. They must keep customer money separate from their own ("safeguarding"), so it should be returned if the firm fails, but there's no guaranteed compensation and it can take longer. Some e-money providers hold savings or balances with a partner bank, in which case that bank's FSCS limit applies. You can check any provider's status on the FCA Register.

How much the FSCS covers depends on your business structure:

For more on protecting larger balances, see business savings accounts.

Protection against scams. If your business is tricked into sending money to a fraudster by bank transfer (an APP scam), your provider must usually refund you up to £85,000 per claim, as long as your business counts as a microenterprise or small charity:

• Microenterprise: fewer than 10 employees, and annual turnover or balance sheet total of no more than €2 million.

• Small charity: annual income under £1 million.

Larger businesses aren't covered by these rules, which makes payment checks such as Confirmation of Payee and approval controls for team payments more important.

How to choose a business bank account

Start with how your business receives money and makes payments, then compare accounts on the features you'll actually use.

Fees and transaction costs. Compare the monthly fee alongside what you'd pay for transfers, card payments received, cash deposits and payments above any free allowance. If keeping costs down is your priority, see our comparison of free business bank accounts.

International payments. If you pay suppliers or receive money from abroad, compare currency conversion markups, international transfer fees, supported currencies and whether you can hold balances in other currencies.

Cash deposits. Many app-based accounts don't accept cash, or charge a percentage to pay it in at the Post Office or a PayPoint. Cash-heavy businesses such as shops and restaurants should check fees, deposit limits and locations.

Accounting and tax tools. Look for integrations with your accounting software and MTD-compatible bookkeeping. Built-in invoicing or tax pots are only worth paying for if they replace something you'd otherwise pay for.

Cards and team access. If several people make payments, compare the number of cards, the cost of extra cards, user permissions and spending controls.

Overdrafts and credit. Many digital business accounts don't offer an overdraft. If short-term borrowing matters to your business, check availability and cost before you open the account.

How to open a business bank account

Most digital providers can open a business bank account online within a day, while high-street banks may take several days or longer. Before you apply, have these ready:

1. Your ID and address: a passport or driving licence, usually with a selfie check in the app.

2. Business details: name, address, what the business does, and expected turnover and payments.

3. Companies House details for a limited company or LLP. Allow a few days after incorporating before applying, so the company appears on the register.

4. The people behind the business: directors, partners and anyone who owns or controls more than 25% (people with significant control).

5. Extra documents if asked: some providers request a business plan, website, invoices or contracts, especially for new or higher-risk businesses.

Opening an account usually involves identity and fraud checks. Some providers also run a soft credit search; a hard search is more likely if you apply for an overdraft or other credit.

How to switch your business bank account

Small businesses can move their business bank account in 7 working days using the Current Account Switch Service (CASS), free of charge. Your new provider handles the switch, and you choose the date.

• Who can use it: businesses with fewer than 50 employees and annual turnover under £6.5 million, including sole traders, partnerships, limited companies, small charities and trusts.

• What moves: your balance, Direct Debits and standing orders. Payments sent to your old account are redirected to the new one.

• The Switch Guarantee: if anything goes wrong, you're refunded any interest or charges caused by the error.

• Check both providers take part. Many e-money providers aren't part of CASS, so you'd need to update payment details with customers and suppliers yourself.

Before switching, update your account details with HMRC, your payment processors and any marketplaces you sell through, as these don't always follow automatic redirection.

How we compare business bank accounts

We list business bank accounts from providers we work with commercially. Our panel changes over time and doesn't cover the whole market, so other accounts may suit your business better.

For every account we check monthly fees, transfer and cash deposit charges, international payment costs, eligibility, features such as cards and accounting integrations, and whether your money is protected by the FSCS or safeguarded. We check details against each provider's own terms and price lists every week, and whenever a provider changes its prices. Partner products are shown first by default; you can sort by monthly fee instead. For more, see How We Rank and Regulatory Information.

Sources

• UK Government – Making Tax Digital for Income Tax for sole traders and landlords

• UK Government – MTD threshold falls to £20,000 from April 2028

• FSCS – Small businesses & limited companies protection

• PSR – APP scams reimbursement, maximum level of £85,000

• Current Account Switch Service

• FCA – Financial Services Register