Setting up as one of the UK’s 3.1 million sole traders, you may have lots of questions around which business bank account is best for you.
You will need to consider cost, free banking period (if there is one), overdrafts and integrations.
We’ll be looking some of the best business bank accounts on the market targeted specifically at sole traders.
Compare business bank accounts now with this quick form.
Traditional banks
High street banks do offer sole trader accounts and they tend to 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.
| Bank/Account | Features | Free banking period | Account fee thereafter |
|---|---|---|---|
| HSBC Kinetic | • Make payments of up to £25,000 per day in-app • Automatically categorised transactions to help monitor spending • Credit card and savings account (subject to eligibility and application) • Insights that could help you manage your money better | 12 months | £6.50 a month |
| HSBC Small Business Banking Account | • Loans from £1,000 to £25,000 • Arranged overdraft • Visa commercial card – no annual fee for the first year • Access to 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 | 12 months | £8 a month |
| TSB Business Plus Account | • Deposit cash and cheques in Post Office branches as well as TSB branches • Add a business debit card to your account • Business advice and support through Enterprise Nation for 12 months | 30 months | £5 a month |
| Co-op Bank Business Current Account | • No additional cost to deposit cash at the Post Office • Payment app, Go Get Paid, lets you automate your financial admin • Integrate your accounting software like Xero, Sage or Quickbooks within your online banking • Free support tools such as webinars and start-up guides | N/A | £0 |
| Barclays Start-up Business Account | • Free invoicing and account software from FreshBooks, worth £260 a year • Expert advice from Barclays’ Business Direct team in the early months to help you grow • Pay in cheques using the Barclays app | 12 months | £8 a month |
| Metro Bank Business Bank Account | • Local Business Manager as a key point of contact, but all colleagues can support you with day-to-day banking • Store opening 7 days a week • Transaction and service charges apply | N/A | £6 a month; free if your balance stays above £6,000 |
| Virgin Money M Account | • Cash cheques digitally • Use with Apple Pay and Google Pay • Set up weekly balance and transaction alerts | N/A | £0 |
HSBC
HSBC has two options for sole traders and single directors of limited companies.
Packages
HSBC Kinetic (Free for 12 months, £6.50 thereafter)
HSBC Kinetic is a mobile business banking app which is best for sole traders. You can apply in minutes through the app. Note that this will need a credit check.
This smartphone app-based business account is available for either Android or iPhone users.
- Make payments of up to £25,000 per day in-app
- Automatically categorised transactions to help monitor spending
- Credit card and savings account (subject to eligibility and application)
- Insights that could help you manage your money better
Small Business Banking Account (Free for first 12 months, £8 per month thereafter)
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.
- Loans from £1,000 to £25,000
- Arranged overdraft
- Visa commercial card – no annual fee for the first year
- Access to 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
Compare HSBC business banking on NerdWallet
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
- Add a business debit card to your account
- Business advice and support through Enterprise Nation for 12 months.
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 Current Account (No account fee)
- No additional cost to deposit cash at the Post Office
- Payment app, Go Get Paid, lets you automate your financial admin
- Integrate your accounting software like Xero, Sage or Quickbooks within your online banking
- Free support tools such as webinars and start-up guides
Compare The Co-operative Bank business banking on NerdWallet
Barclays
Barclays start-up business account is the bank’s best offering for sole traders.
Package
Start-up Business Account (Free for 12 months, £8.50 a month thereafter)
- Free invoicing and account software from FreshBooks, worth £228 a year
- Expert advice from Barclays’ Business Direct team in the early months to help you grow
- Pay in cheques using the Barclays app
Metro Bank
Metro Bank has a simple Business Bank Account open to sole traders with under £2m turnover.
Package
Business Bank Account (£6 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 7 days a week
- Transaction and service charges apply
Compare Metro business banking on NerdWallet
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 Pay
- Set up weekly balance and transaction alerts as you like
Compare Virgin business banking on NerdWallet
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.
| Provider | Packages |
|---|---|
| Tide | Free (£0) • Accounting integrations including QuickBooks, Xero, Quickbooks, Xero, Sage and more • Multi-business – hold up to five accounts • Create and send invoices for free Plus (£9.99 per month plus VAT) All of the features of Free, and: • One free expense card for your team • Priority in-app support Pro (£18.99 per month plus VAT) All of the features of Plus, and: • Unlimited transfers in and out • One extra expense card included Cashback (£49.99 per month plus VAT) All of the features of Pro, and: • 0.5 per cent cashback on your Tide card • Dedicated team of account managers |
| Starling Bank | Original free account (£0) • Connect to Quickbooks, Xero or FreeAgent • 24/7 UK support • Free UK 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 VAT submission |
| ANNA Money | 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 (£14.90 per month plus VAT) • Pay in cash with one per cent commission • Five additional debit cards included, then £3 per card per month |
| Coconut | Monthly plan (£9 a month including VAT) • 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 25+ 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 |
| Revolut | Free (£0 a month) • Five free local payments • Free transfers to Revolut accounts • Local accounts in GBP Grow (£19 a month) • Five free international payments • 100 free local payments Scale (£79 a month) • 25 free international payments • 1,000 free local payments Freelancer accounts Free (£0 a month) • Five fee-free local transfers • No-fee transfers to Revolut accounts • SWIFT account details Professional (from £5 a month) Everything in the Free package, and: • Bulk payments • 20 no-fee local transfers • £5,000 currency exchange at the interbank rate Ultimate (from £19 a month) Everything in the Professional package, and: • Five fee-free international transfers • 100 no-fee local transfers • One complimentary metal card |
| Monzo | Lite (£0) • Integration with Xero, FreeAgent and QuickBooks • Instant notifications Pro (£5 per month) Everything in Lite, and: • New Xero users can get six months of the cloud accounting platform free • Tax Pots – set aside a percentage of your earnings to put towards tax every time you’re paid |
| Amaiz | Business (£0 a month – VAT may apply) • Free onboarding Business+ (£49 a month – VAT may apply) • £100 onboarding fee Enterprise (£99 a month – VAT may apply) • £250-£1,000 onboarding fee |
| Mettle | 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 |
Tide
With Tide, you’ve got three 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
- Multi-business – hold up to five accounts
- Create and send invoices for free
Plus (£9.99 per month plus VAT)
All of the features of Free, and:
- One free expense card for your team
- Priority in-app support
Pro (£18.99 per month plus VAT)
All of the features of Pro, and:
- Unlimited transfers in and out
- One extra expense card included
Cashback (£49.99 per month plus VAT)
All of the features of Plus, and:
- 0.5 per cent cashback on your Tide card
- Dedicated team of account managers
Compare Tide business banking on NerdWallet
Starling Bank
The Starling Bank business account is open to you if you’re a sole trader or the owner of a limited company, a limited liability partnership or if you’re part of a limited company with multiple owners.
There’s no monthly charge on the account and it comes with an overdraft. To boost your business’ functionality, you can opt for the Business Toolkit for £7 a month.
Packages
Original free account (£0)
- Connect to Quickbooks, Xero or FreeAgent
- 24/7 UK support
- Free UK 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 VAT submission
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 which are more suitable for sole traders, particularly those in the early stages. A Big Business package is also available at £49.90 a 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 (£14.90 per month plus VAT – first month free)
- Pay in cash with one per cent commission
- One additional debit cards included, then £3 per card per month
Compare ANNA Money business banking on NerdWallet
Coconut
Coconut is geared specifically at sole traders but is open to limited companies with 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.
Package
Monthly plan (£9 including VAT)
- 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 25+ 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
Revolut
Revolut is a good shout for business owners who travel and trade overseas. Customers can hold, exchange and transfer over 25 currencies with the real exchange rate.
You can issue physical and virtual cards and track your employees spending in real time. Integrations including Zapier and Slack and accounting software like Xero, Sage, FreeAgent, QuickBooks and FreshBooks.
Packages
In terms of accounts you’ve got:
Free (£0 a month)
- Five free local payments
- Free transfers to Revolut accounts
- Local accounts in GBP
Grow (£19 a month)
Everything in Free package, and:
- Five free international payments
- 100 free local payments
Scale (£79 a month)
Everything in Scale, and:
- 25 free international payments
- 1,000 free local payments
For freelancer accounts, there are three packages:
Free (£0 a month)
- Five fee-free local transfers
- No-fee transfers to Revolut accounts
- SWIFT account details
Professional (from £5 a month)
Everything in the Free package, and:
- Bulk payments
- 20 no-fee local transfers
- £5,000 currency exchange at the interbank rate
Ultimate (from £19 a month)
Everything in the Professional package, and:
- Five fee-free international transfers
- 100 no-fee local transfers
- One complimentary metal card
Compare Revolut business banking on NerdWallet
Monzo
Monzo has a couple of low-cost options depending on your business needs.
Accounts aren’t available to some types of businesses but this may be reviewed in future.
Packages
Lite (£0)
- Integration with Xero, FreeAgent and QuickBooks
- Instant notifications
Pro (£5 per month)
Everything in Lite, and:
- New Xero users can get six months of Xero free
- Tax Pots – set aside a percentage of your earnings to put towards tax every time you’re paid
Compare Monzo business banking on NerdWallet
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)
- Free onboarding
Business+ (£49 a month – VAT may apply)
- £100 onboarding fee
Enterprise (£99 a month – VAT may apply)
- £250-£1,000 onboarding fee
Mettle
Mettle is part of NatWest but is an independent arm. You’ll be eligible if you’re a sole trader, though you must have a balance of less than £50,000 to apply.
Mettle is free to use and free to join.
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
Compare Mettle business banking on NerdWallet
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.
Looking for the latest deals? Compare UK business bank accounts with Nerdwallet here.
More on being a sole trader
