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What are the best business bank accounts in the UK?

When you want to create a new business, particularly if you want to set up a limited company, having a business bank account is essential. But with so many business bank accounts on the market, comparing each one can be tricky. That's why we’ve created a handy comparison guide.

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Just like offices, business bank accounts are becoming more virtual and flexible. This means more options are available for freelancers and small businesses, enabling them to make the right choice for their company.

But with so many business bank accounts on the market, comparing each one can be tricky. Luckily for you, we’ve created a handy comparison guide to see which features matter most to you.

Disclaimer: there are lots of other business banking options available. These are just a select few we’ve decided to include. Remember to do your own research before embarking on a business bank account.

What is a business bank account?

When you want to create a new business, particularly if you want to set up a limited company, having a business bank account is essential. Similar to a personal bank account, you’re able to deposit and withdraw money, but the difference is that you only conduct business transactions through that account.

This is useful for keeping track of business expenses and bills, such as software and travel costs. It also makes your bookkeeping much easier when it comes to doing taxes.

Why can’t I use my personal bank account for my business?

The short answer is that you can – but the longer answer is whether you want to. As a sole trader or freelancer, it might feel unnecessary to open a business bank account as there’s no legal requirement to have a business account. Most banks outline in their T&Cs that you cannot use your personal bank account for business purposes, so make sure you check this if you intend to use your personal account.

However, if you want to set up a limited company, it’s a legal requirement to have a business bank account.

Compare business bank accounts

Instead of scouring the internet for the best business bank accounts (especially if this is your first time setting one up), we’ve compiled a list of some of the top ones on the market at the moment.

These accounts are ideal for freelancers or small businesses as they don’t have extortionate fees, as well as no minimum turnover requirements. Some are purely online banks too, which, if you run a remote, online business, can be just what you need, especially if you’re starting your business on a budget.

Starling Bank

If customer service is your jam (we know it’s ours), then Starling Bank is a shoo-in for your business bank of choice. Their customer satisfaction ratings are sky-high, ideal if you’ve never had to deal with business banking before. The application process is also quick and simple, meaning you can be ready and raring to go in minutes.

Key features

  • 24/7 customer support, based in the UK
  • Able to apply in minutes
  • 100% digital sign up

Pricing model

With Starling Bank, you have the option of either setting up a sole trader bank account or a business bank account, both of which have no monthly fees. You can customise the business bank account to enable you to send invoices, HMRC tax calculations, and more. These add-ons equal £7 per month, so still not breaking the bank (literally).

Virtual HQ rating: 4/5

 

Tide

Tide is a great option if you need to get set up quickly with a business bank account. The application process is pretty straightforward and doesn’t require too much paperwork or submissions.

Key features

  • Quick and easy setup, especially if you’re forming a limited company
  • Manage expenses and invoices via the app
  • Both a desktop and mobile version available

Pricing model

Tide is free initially, with the option to upgrade to a £10 per month plus account. This allows you 20 transfers per month and a different coloured bank card. Snazzy. You can also choose an £18.99 per month account, which allows you to make unlimited transfers and have additional cards for team members.

Virtual HQ rating: 3.5/5

 

Santander

Well-known already, Santander is a global banking player. But its small business banking offering is also well-known too, with inexpensive fees and branches you can visit. The flat rate pricing model makes it an easy choice for many small businesses, who don’t want the surprise of additional fees.

Key features

  • Branches across the country
  • Great business loan rates
  • Inexpensive and flat rate fees

Pricing model

The Santander 123 Business Current Account is £12.50 per month, with introductory business offers, starting at £5 per month, and you can earn cashback based on how much your business turns over.

Virtual HQ rating: 4/5

 

Barclays

Another big player, Barclays is an established bank and many larger companies choose them (for example, if you have a turnover of £400,000 or more). For start-ups and freelancers, there is an attractive 12-month free banking option, with an £8 monthly fee after that. Important to note that Barclays sometimes pause accepting new business bank account applications, based on the current economic climate or if they have too many applicants.

Key features

  • Access to business advisers and managers
  • Branches across the UK
  • Send invoices for free

Pricing model

Depending on the size of your business and its annual turnover will determine how much your Barclays business bank account will cost. For smaller businesses, this tends to be £8 per month.

Virtual HQ rating: 3/5

 

Metro Bank

Rated highly by its customers, Metro Bank is a great option if you’re after a strong working relationship with your bank, as well as the availability of overdraft facilities and loan services.

Key features

  • Receive a decision in minutes
  • Borrow up to £60,000 with their Business Overdraft
  • Five-star-rated app

Pricing model

It’s not completely clear-cut what Metro Bank’s pricing model is, but when your bank balance falls below £6,000 per month, account fees are around £6 – if your bank balance is greater than that amount, fees are scrapped.

Virtual HQ rating: 3.5/5

 

Handelsbanken

It’s hard to think of Handelsbanken and not think of a corporate heavy brand. But this company ranks highly when it comes to overall service quality for its business bank accounts, ahead of Santander and Barclays, and just shy of Starling Bank.

Key features

  • Account manager and relationship team at your local branch
  • Current account switch service, if you’re looking to change
  • Go in-branch or online to open and sort your account

Pricing model

It’s unclear on costs, as these aren’t available on their website, although other comparison sites claim there are no monthly fees. However, this is because they offer a bespoke banking experience for each business, which might be exactly what you need.

Virtual HQ rating: 3/5

 

The Co-operative Bank

Although The Co-operative Bank probably ranks the lowest on our list in terms of customer ratings and service quality, we’ve included this as an ethical banking option. They also offer new business banking customers 30 months free, which is pretty cushty.

Key features

  • Free 30 months of everyday banking for new customers
  • Free withdrawals (even after the 30-month period has ended)
  • Ethical banking, so no financing of fossil fuels

Pricing model

For their Business Directplus account, as long as your balance is above £1,000, you can experience 30 months of free banking. If you do fall below £1,000, there is a monthly charge of £7. This is a great account if you’re looking for simple online banking, without any other features, and low to no fees.

Virtual HQ rating: 3/5

 

All set up and raring to go with your business bank account? Make it even more official with a virtual office address. Check out our range of locations here.

Haley heads up all things marketing here at Virtual HQ - making sure that we're visible online and that we look damn good.

Haley Darby
Haley Darby

Head of Marketing

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