As a sole trader, having a separate bank account for your business is not legally required, but it is very useful.
A dedicated business bank account can help you stay organised and make it easier to track expenses and income for tax purposes. It also helps to separate your personal and business finances, providing a clear picture of the financial health of your business.
This article will discuss the top sole trader bank accounts available in the market and explore their features and benefits.
- One of the best Apps in the sector
- No Monthly or Annual Fees
- Easy Invoice Creation Functionality
- Post Office Deposits Cost £1
- 20p charge for transfers between accounts
- 3% charge for cash deposits at Paypoints
- Ecommerce – Easy integration with Ecommerce via Apps and Plugins
- International payments – Send and receive money from 200 countries
- Block cards or set accounting limits with a tap
- Available for Limited Companies Only
- Accounts do not support cash or cheque deposit
- Typically one of the most cost-effective providers, although the sector is now very competitive
- 80% of payments are settled within 24 hours, and 35% of the total are instant
- complete transparency on all fees;
- No bank branches
- No cash deposits or transactions
- No credit or business loan facilities are available
- Quick application process
- Free to join and use
- Issuing invoices is easy
- App includes expense management functionality
- Good integration with all major accountancy software providers
- If you lose your card, it’s simple to free it from within the APP.
- As an e-money account it’s not FSCS protected
- You can’t pay out more than £10,000 per day
- There isn’t any overdraft or credit card available
- Cheque deposits are not available
- International payments are not available
- Instant Invoice Generation
- Good customer service via Live Chat
- Xero Integration
- Easy VAT submission to HMRC via App
- To open a business account, you’ll need a photo of your full driving licence or a photo of your valid passport.
- You can apply from outside the UK, but only if you’re a UK resident
- Anna carry out an identity check for new acccounts but not a credit check
Our Best Banks Accounts for Sole Traders & Self Employed
- The best overall business sole trader account: Tide
- The best sole trader account for those operating in the EEA: Revolut
- The best sole trader account that is crypto-friendly: Revolut
- The best sole trader account for those getting paid internationally: Wise Business
- The best overall account for freelancers: Anna
| Bank | Monthly Fees | Star Rating | Get Started |
|---|---|---|---|
| Anna | Free | ★★★★★ | Visit Anna |
| Bank of Scotland | 12 months free, then £7 per month | ★★★ | Visit Bank of Scotland |
| Barclays | 12 months free, then £8.50 per month | ★★★ | Visit Barclays |
| Card One Money | £12.50 per month | ★★ | Visit Card One Money |
| Cashplus | Free | ★★★ | Visit Cashplus |
| Cooperative Bank | 30 months free, then £7 per month | ★★★ | Visit Cooperative Bank |
| Counting Up | 3 months free, then £3, £9, or £18 | ★★ | Visit Counting Up |
| Fair Everywhere | £55 application fee, then £12.50 per month | ★★ | Visit Fair Everywhere |
| HSBC | 12 months free, then £8 per month | ★★★ | Visit HSBC |
| Lloyds | 12 months free, then £7 per month | ★★★ | Visit Lloyds |
| Metro | Free if balance is £6000 or more, £6 if below | ★★★ | Visit Metro |
| Mettle | Free | ★★★★ | Visit Mettle |
| Monese | Free, £5.95 or £14.95 per month | ★★★ | Visit Monese |
| Monzo | Free or £5 per month | ★★★★ | Visit Monzo |
| Natwest Startup | 18 months free | ★★★ | Visit NatWest Startup |
| Royal Bank of Scotland | 24 months free | ★★★ | Visit Royal Bank of Scotland |
| Revolut | Free | ★★★★★ | Visit Revolut |
| Starling | Free or £7 per month | ★★★★★ | Visit Starling |
| TSB | 30 months free | ★★★ | Visit TSB |
| Tide | Free | ★★★★★ | Visit Tide |
| Ulster Bank | 18 months free | ★★★ | Visit Ulster Bank |
| Virgin Money | Free | ★★★ | Visit Virgin Money |
| Wise Business | Free (opening an account costs 45GBP) | ★★★★★ | Visit Wise |
The Best Business Bank accounts for Sole Traders
Tide: Best Overall Sole Trader Bank Account with No Fees
Tide offers a popular digital-first business bank account with no monthly fees. Its free account comes with no monthly fees and is ideal for sole traders.
Some potential benefits for sole traders using Tide include:
- Quick and easy account opening process
- The app provides an easy way to track business expenses and income.
- Ability to use the account for business purposes
- The app includes accounting, invoicing and receipt-scanning features
- The account includes a Mastercard debit card
- 24/7 customer service
Reasons to Avoid Tide
- Limited ATM withdrawals
- The app is not yet fully functional in some countries
- Some features are only available for paid accounts (Tide Plus)
- No cheques facility
- No overdraft or credit facilities
Revolut: the best sole trader bank account for those operating in the EEA
Revolut is a fintech company that offers a range of financial services, including business accounts for sole traders. Some potential benefits for sole traders using Revolut include the following:
Features And Benefits Of Revolut for Sole Traders
- Quick and easy account opening process
- The app provides an easy way to track business expenses and income
- Ability to use the account for business purposes
- Free international money transfer
- The account includes invoicing and receipt-scanning features
- 24/7 customer service
- Physical debit card
- Access to a wide range of currencies with interbank exchange rates
Reasons to Avoid Revolut
- Limited ATM withdrawals
- Some features may only be available to some customers.
- Revolut is a relatively new company and may have a different experience and resources than some of the more established banks.
- No cheques facility
- No business overdraft or credit facilities
Anna: Best Sole Trader Bank Account for Freelancers
Anna Money is a bank account created explicitly for sole traders, freelancers and small businesses. It’s designed to be affordable, simple to use, and to minimise the admin side of running a business that can be time-consuming.
If you’re just starting out, we think Anna represents great value for money, and their customer service is notably good. The account is not FSCS protected as opposed to something like Tide.
Features and Benefits of the ANNA Money Account for Sole Traders
- No monthly fee for the Pay as You Go Account, or £14.90 for the full features
- It comes with a contactless Mastercard debit card
- Open an account within 10 minutes
- The Anna APP is easy to navigate and understand
- Real-time App notifications so that you can keep track of your transactions
- Easily set up direct debits and standing orders from the APP
- The platform has a built-in tax App, meaning you can invoice from your phone without investing in third-party software
- Customer service is very quick to respond
Reasons Against the Anna Money Account:
- Anna Money doesn’t offer an overdraft facility
- £1 for an ATM withdrawal
- No branches or in-person support
- Charges for foreign currency transactions
- No cheque deposits
» MORE Read our full Anna Money Review
Wise: the best sole trader bank account for those getting paid internationally
The Wise International Business Account provides several benefits for sole traders.
Reasons For Using Wise:
- Multi-currency account: The Wise International Business Account allows you to hold and manage money in over 50 currencies. This makes it easy to receive payments from customers and pay suppliers in their local currencies, saving you money on currency conversion fees.
- Low fees: Wise charges low fees for international money transfers, with transparent exchange rates and no hidden fees.
- Easy invoicing and payment collection: The account has built-in invoicing and payment collection tools, making it easy to invoice customers and receive payments.
- Integration with other tools: The Wise International Business Account can be integrated with other business tools, such as accounting software and e-commerce platforms, making it easy to manage your finances.
- Secure and reliable: Wise uses advanced security measures to protect your account and transactions and has a track record of reliability and trustworthiness.
Reasons Against Using Wise
- No physical branches
- No overdrafts
- Does not offer traditional banking services
- No credit cards
- Not FSCS Protection
Bank Of Scotland
Part of the Lloyds Banking Group, one of the largest financial institutions in the UK, The Bank of Scotland offers a dedicated account for Startup and Small Businesses, including sole traders.
Overall, Trustpilot reviews of only a 1.5 Star average suggest there are better choices in the current market.
Features And Benefits Of The Bank Of Scotland Startup Account For Sole traders
- 12 months of free banking
- Access to a dedicated Business Manager for support and advice
- UK-based customer service
- Ability to apply for a business credit card or overdraft
- FSCS Protection & FCA Regulated
- 24/7 customer service
Reasons Against the Bank of Scotland Startup Account:
- It can take up to six weeks to open the account
- After the first 12 months, £7.00 per month.
- £0.85 to issue a cheque or pay one in
- The account requires a credit check
- Bank of Scotland has a lower branch density than other central banks and may not have a branch close to your location
- Poor online reviews for customer service
Barclays Startup Business Account
As the UK’s fourth largest bank, Barclays offers all the benefits you’d expect from a major high-street bank. However, their functionality doesn’t match that of certain challenger banks, meaning there may be better choices unless you specifically need their overdraft or loan functionality.
Features And Benefits Of The Barclays Startup Business Account For Sole Traders
- Barclays is a well-established and reputable bank, fully regulated and FSCS protected
- Free banking for the first 12 months
- Contactless debit card
- Free invoicing and account software from FreshBooks, worth £228 per year
- Business mentoring and networking events to help new businesses grow and succeed
- Barclays also offers a variety of loan options to support business growth
Reasons Against The Barclays Startup Business Account:
- After 12 months, the Barclays Startup account costs £8.50 per month.
- Requires a credit check
- 60p charged per £100 cash paid in or withdrawn
- Some customers may find the account opening process to be lengthy and complicated.
Card One Money
Card One Money is an e-money account rather than a fully regulated bank account aimed at those who might not pass a full credit check.
There are some costs involved with the account, which may put off some users, but on the plus side, the Trustpilot reviews are excellent, with a 4.5-star average.
Features And Benefits Of the Card One Money Account for Sole Traders
- CardOneMoney does not require a credit check
- No charge to open the account
- The account offers a contactless Mastercard debit card
- The account opening process is fast and easy
- Instant domestic and international payments
Reasons Against Choosing Card One Money
- £55 application fee (refunded if not approved)
- £12.50 monthly fees
- Cash deposit value of 0.75%
- Same-day faster payments are charged at £7.50
- Standing orders cost 30p
- 1.50 to withdraw money using the Prepaid Corporate Mastercard
- 15p charge to check your card balance by SMS
- Limited customer support
- Some customers may prefer a more conventional banking experience
- The company focuses mainly on credit management; not all businesses may require this service.
» MORE Read our full Card One Money Review
Cashplus
Cashplus is a fully licensed UK bank that offers personal and business accounts.
You can apply for their business account as a sole trader. It comes with a UK-based customer services team, Financial Conduct Authority (FCA) protection like high street banks, and 24-hour fraud monitoring.
Features And Benefits Of Cashplus for Sole Traders
- No hard credit check required
- Fast application process
- Positive Reviews
- Contactless Mastercard debit card
- Credit Builder functionality to help you repair credit
- Overdrafts for those that meet their criteria (up to £2000)
- Cashplus offers flexible pricing options to suit the needs of different businesses.
Reasons Against Choosing Cashplus
- Some customers may prefer a more established bank
- Can’t send money internationally
- Customer service isn’t 24/7
- £2 to withdraw cash from an ATM in the UK
- £15 for incoming international payments
- Some additional fees for specific functionality
Cooperative Bank
The Cooperative Bank is the only high street bank in the UK with a customer-led Ethical Policy. This includes not investing in specific industries such as tobacco or arms.
With some 15 locations, it’s a choice to consider if you live near one of these and require the functionality of a real branch or if the ethical policy is important to you.
Otherwise, other banks are offering more feature-rich accounts and ease of use. A recent survey ranked it 15th in overall service quality and for its overall online and mobile banking experience.
Features And Benefits Of Cooperative Bank for Sole Traders
- Cooperative Bank is a reputable bank with an ethical focus
- Easy switching service
- The bank offers a range of business banking accounts, Business Directplus, Business Current Account and the FSB business banking account
- 15 bricks and mortar branches around the UK
- Cooperative Bank’s customer service is available 24/7
- Cooperative Bank offers other financial products and services, such as insurance and investment options
Reasons to Avoid Cooperative Bank
- The Cooperative Bank has had financial struggles, which may make some customers hesitant to open an account.
- Some customers may prefer a more digital banking experience
- Some customers may prefer an account with more features
- Some customers may find the account opening process to be lengthy and complicated.
Counting Up
Countingup was founded by Tim Fouracre, former CEO of Clearbooks. It is not a traditional bank, meaning it does not hold a banking license and does not have the same regulations as traditional banks.
Instead, it partners with Prepay Technologies to offer e-money services. Overall, the reviews for Counting Up are positive, but it falls short of comparison to the top three of Tide, Starling and Monzo for most users
Features And Benefits Of Countingup For Sole Traders
- Quick application process
- Three month’s free banking for new accounts, then £3, £9 or £18, depending on turnover
- In-APP invoicing, which saves having to pay for additional software
- The account offers a contactless Mastercard debit card
- Countingup offers a range of integrations with popular accounting software such as Xero and QuickBooks.
- It provides real-time notifications so that you can keep track of your transactions.
- Offers a free business account with no monthly fees, no minimum deposit and no hidden costs.
Cons of Countingup
- No physical branches
- Customer service is limited to email
- No overdrafts
- You can’t issue or pay in cheques
- ATM withdrawals: £1
- Post Office deposit: 0.5% (£2 min fee)
- PayPoint deposit: 3%
- Foreign currency transaction fee: 3%
Fair Everywhere
Fair Everywhere is a bank account offered by Equals Money, which is listed on the London Stock Exchange.
This account is designed for businesses trading intentionally, meaning its direct competitors are Revolut and Monzo. We feel Revolut or Monzo offers most users a better user experience and broader functionality.
Features And Benefits Of Fair Everywhere:
- Speedy means that your account could be opened on the same day
- Accepts cash and cheque deposits (cheque deposits are subject to a fee)
- The ability to hold multiple currencies (Euros, US dollars, and GB pounds) in the same account
- Multiple cards are available for each account, with the ability to set limits
- A business bank account tailored to those making international payments.
- Ability to create balances in multiple currencies.
- Earn cashback when spending at 50+ UK retail partners.
- No credit checks required
- Dedicated account manager for personalised support
- Cashback rewards for spending
- Can use Post Office cash & cheque services
Reasons to Avoid Fair Everywhere
- Limited customer support options
- Additional fees per transaction, in addition to a monthly fee
- No overdraft facilities are available, so you may have to seek alternative funding sources.
- No in-branch customer service.
- Expensive application fee
- No FSCS protection
- No branches, which may not be suitable for customers who prefer to see a person.
HSBC
Features And Benefits Of HSBC Small Business Banking Account
- As the largest bank in Europe, an account with HSBC offers excellent credibility and branch access
- HSBC Small Business Banking Account offers various banking services, including online banking, mobile banking, and telephone banking.
- The account comes with a contactless debit card, which can be used to make purchases and withdraw cash.
- HSBC offers a range of loan options to support business growth
- HSBC offers resources and support services, such as business mentoring and networking events, to help new businesses grow and succeed.
- The bank also offers a variety of savings options that can help businesses to grow their savings.
- 24/7 customer service support
Reasons to Avoid HSBC Small Business Banking Account:
- HSBC may have a minimum deposit requirement
- Some customers may find the account fees to be high
- Limited to businesses based in the UK
- Some customers may prefer a more digital banking experience
- Some customers may prefer an account with more features
- Some customers may find the account opening process to be lengthy and complicated.
- Some customers may find the account fees to be high.
Lloyds
Features And Benefits Of Lloyds Startup and Small Business Account for Sole Traders
- Lloyds is a well-established and reputable bank with a wide range of services and resources for businesses.
- The Startup and Small Business Account offers a range of benefits, including free banking for the first 12 months; after that, a monthly fee applies.
- The account comes with a contactless debit card, which can be used to make purchases and withdraw cash.
- Lloyds offers a range of online and mobile banking tools to help manage your finances on the go.
- The bank offers various resources and support services, such as business mentoring and networking events, to help new businesses grow and succeed.
- Lloyds also offers a variety of loan options to support business growth.
- 24/7 customer service support
Reasons to Avoid Lloyds Startup and Small Business Account
- After 12 months, the account may become subject to a monthly fee
- Some customers may find the account fees to be high
- The account may have a minimum deposit requirement
- Limited to businesses based in the UK
- Some customers may prefer a more digital banking experience
- Some customers may prefer an account with more features
- Some customers may find the account opening process to be lengthy and complicated.
Metro
Metro Bank offers a Small Business and Startup account, including sole traders, for new businesses. Some potential benefits for sole traders using Metro Bank’s Small Business and Startup account include:
Features And Benefits Of Metro Small Business and Startup Account for Sole Traders
- Access to a range of business banking services, such as online banking and overdrafts
- Access to a dedicated Business Manager for support and advice
- Free banking for the first 12 months
- Ability to apply for a business credit card
- Metro Bank has an extensive network of branches in the UK, which allows for easy access to physical banking services
- 24/7 customer service
Reasons to Avoid Metro Small Business and Startup Accounts
- Limited ATM withdrawals
- After the first 12 months, fees may apply
- The account may have a credit check or proof of address requirement
- Some features may not be available to all customers
- Some services may have additional costs
Mettle
Mettle is a digital business banking platform offering services and features for small businesses and freelancers.
Features And Benefits Of Mettle for Sole Traders
- Quick Sign Up
- Contactless Mastercard debit card, which can be used to make purchases and withdraw cash.
- Mettle offers a range of integrations with popular accounting software such as Xero and QuickBooks.
- It provides real-time notifications so that you can keep track of your transactions.
- Mettle offers a free business account with no monthly fees, no minimum deposit, and no hidden costs.
- 24/7 customer service support
Reasons to Avoid Mettle
- Mettle is a relatively new bank and may have a different level of credibility than more established banks.
- Some customers may prefer a more traditional banking experience
- Limited customer support is only available through email and chat.
- Limited to businesses based in the UK
- Some businesses may find the account features to be limited.
- Some customers may find the account opening process to be lengthy and complicated.
- Mettle may have a minimum deposit requirement.
Monese
Monese is a mobile banking app that allows users to open a UK or European bank account within minutes without needing a credit check or proof of address.
Some potential benefits for sole traders using Monese include:
Features And Benefits Of Monese for Sole Traders
- Quick and easy account opening process
- No credit check or proof of address required
- Multiple account options, including UK and European accounts
- Low fees for international money transfers
- Ability to use the account for business purposes
Reasons to Avoid Monese
- Limited physical banking options, such as the absence of checks or cash deposit
- Limited ATM withdrawals and a fee for additional ATM withdrawals
- No overdraft or credit facilities
Monzo
Monzo is a mobile banking app that offers various banking services, including current accounts, business accounts, and credit cards. Some potential benefits for sole traders using Monzo include the following:
Features And Benefits Of Monzo for Sole Traders
- Quick and easy account opening process
- The app provides an easy way to track business expenses and income
- Ability to use the account for business purposes
- Free international money transfer
- 24/7 customer service
- Physical debit card
Reasons to Avoid Monese
- Limited ATM withdrawals
- The app is not yet fully functional in some countries
- Some features may not be available to all customers
- no cheques facility
- No overdraft or credit facilities
Natwest
Natwest offers a Startup business account for new companies, including sole traders. Some potential benefits for sole traders using a NatWest Startup business account include the following:
Features And Benefits Of Natwest Startup Account for Sole Traders
- Access to free banking for the first 12 months
- Access to a dedicated Relationship Manager to help with business advice and support
- Ability to apply for a business credit card
- Ability to apply for an overdraft
- Access to a range of other business banking services, such as online banking and business loans
- 24/7 customer service
Reasons to Avoid Natwest
- Limited ATM withdrawals
- After the first 12 months, fees may apply
- The account may have a credit check or proof of address requirement
- Some features may not be available to all customers
Royal Bank of Scotland
The Royal Bank of Scotland (RBS) offers a Startup account for new businesses, including sole traders. Some potential benefits for sole traders using an RBS Startup account include the following:
Features And Benefits Of Royal Bank of Scotland Startup Account for Sole Traders
- Access to free banking for the first 12 months
- Access to a dedicated Relationship Manager to help with business advice and support
- Ability to apply for a business credit card
- Ability to apply for an overdraft
- Access to a range of other business banking services, such as online banking and business loans
- 24/7 customer service
Reasons to Avoid Royal Bank of Scotland
- Limited ATM withdrawals
- After the first 12 months, fees may apply
- The account may have a credit check or proof of address requirement
- Some features may not be available to all customers
- RBS has a lower branch density than other major banks and may not have a branch close to your location
Starling
Starling Bank offers a business account for sole traders. Some potential benefits for sole traders using Starling’s business account include the following:
Features And Benefits Of Starling Sole Trader Account
- Quick and easy account opening process
- The app provides an easy way to track business expenses and income
- Ability to use the account for business purposes
- Free international money transfer
- The account includes invoicing and receipt-scanning features
- 24/7 customer service
- Physical debit card
Reasons to Avoid Starling
- Limited ATM withdrawals
- The app still needs to be fully functional in some countries.
- Some features may not be available to all customers.
- Starling is a relatively new bank and may have a different experience and resources than some of the more established banks.
- No cheques facility
TSB
TSB offers a Business Plus account for sole traders and small businesses. Some potential benefits for sole traders using TSB’s Business Plus account include the following:
Features And Benefits Of TSB Business Plus Account for Sole Traders
- Access to a range of business banking services, such as online banking and overdrafts
- Access to a dedicated Business Manager for support and advice
- Free banking for the first 18 months
- Ability to apply for a business credit card
- 24/7 customer service
Reasons to Avoid TSB
- Limited ATM withdrawals
- After the first 18 months, fees may apply
- TSB has a lower branch density than other major banks and may not have a branch close to your location
- Some features may not be available to all customers
Features And Benefits Of Tide for Sole Traders
Ulster Bank
Ulster Bank offers a Startup Bank Account for new businesses, including sole traders. Some potential benefits for sole traders using Ulster Bank’s Startup Bank Account include:
Features And Benefits Of Ulster Bank Startup Account for Sole Traders
- Access to a range of business banking services, such as online banking and overdrafts
- Access to a dedicated Business Manager for support and advice
- Free banking for the first 12 months
- Ability to apply for a business credit card
- 24/7 customer service
Reasons to Avoid Ulster Bank Startup Account
- Limited ATM withdrawals
- After the first 12 months, fees may apply
- Ulster Bank has a lower branch density than other major banks and may not have a branch close to your location
- The account may have a credit check or proof of address requirement
- Some features may not be available to all customers
Virgin Money
Virgin Money offers an M Account for Business, including sole traders. Some potential benefits for sole traders using Virgin Money’s M Account for Business include:
Features And Benefits Of Virgin Money M Account for Sole Traders
- Access to a range of business banking services, such as online banking and overdrafts
- Ability to apply for a business credit card
- Low-cost banking options, including free banking for smaller businesses
- 24/7 customer service
Reasons to Avoid the Virgin Money M Account
- Limited ATM withdrawals
- Some features may not be available to all customers
- Virgin Money has a lower branch density than other major banks and may not have a branch close to your location
- Some services may have additional costs
- The account may have a credit check or proof of address requirement
What bank account do I need as a sole trader?
As a sole trader, there’s no legal obligation for you to open a separate business bank account. You have the option to use your personal bank account for all your business transactions. This approach is permissible because, for tax purposes, HM Revenue & Customs (HMRC) views your personal and business income as one.
Nonetheless, it’s common for sole traders and small unincorporated businesses to opt for dedicated sole trader bank accounts to simplify the management of their business finances.
What are the benefits of having a dedicated bank account for my sole trader business?
Having a dedicated bank account makes it easier to manage your finances, track business expenses, and prepare for tax returns. It also presents a more professional image to your clients and helps separate your personal and business finances.
How does having a sole trader bank account affect my taxes?
While having a separate bank account doesn’t directly affect how much tax you pay, it can make it easier to report your income and expenses accurately to HMRC. This can help ensure you’re paying the correct amount of tax and claiming all allowable expenses.
How do I open a sole trader bank account?
To open a sole trader bank account, you’ll typically need to provide personal identification, proof of address, and details about your business, such as your business name and nature of activities. Some banks may allow you to open an account online, while others may require a visit to a branch.
