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NGNo annual or monthly fee
December 2024
Not sure if it’s worth opening a separate bank account as a sole trader?
Whilst sole trader’s aren’t required to separate their business and personal finances, there are several advantages. Compare your best options with our simple tool below.
For a personalised banking report, and access to tailored funding and savings opportunities for your business, simply register here.
Choose your business current account options
Use the checkbox beside each bank’s name to select and compare banks:
Account fee
Free
Opening time
1 day
Bank transfers
£0.20
Invoicing
doneOverdrafts
closeNo annual or monthly fee
Account fee
Free
Opening time
10 mins
Bank transfers
Free
Invoicing
doneOverdrafts
closeCalculates taxes & VAT for you automatically
Account fee
Free
Opening time
1 day
Bank transfers
£0.20
Invoicing
doneOverdrafts
closeFree tools for accounting and invoicing
Account fee
Free
Opening time
Up to 5 days
Bank transfers
Free
Invoicing
doneOverdrafts
closeIBAN accounts in GBP, USD and EUR
Account fee
Free
Opening time
10 mins
Bank transfers
£0.20
Invoicing
doneOverdrafts
closeNew Limited company registration
Account fee
No monthly or annual fees, just an initial £9.95 card fee
Opening time
4 mins
Bank transfers
First 3 free each month and the £0.30 thereafter
Invoicing
doneOverdrafts
doneIntegrated with all accounting packages
Account fee
£8
Opening time
15 Days
Bank transfers
Free
Invoicing
doneOverdrafts
closeFree banking for 12 months
Account fee
£4.16 (£50/year)
Opening time
Your account can be opened on the same day you apply
Bank transfers
Free in 20 major currencies, 1.5% fee for other currencies
Invoicing
closeOverdrafts
closeManage business expenses easily with complete control & get great rates on international transfers. Free for charities & non-profits. No credit checks.
Account fee
Free for 12 months, then £6
Opening time
Within 3 weeks
Bank transfers
From £0.35
Invoicing
doneOverdrafts
Subject to availability
12 months FREE banking
Account Fee
From £6
Opening time
Within 3 weeks
Bank transfers
From £0.35
Invoicing
doneOverdrafts
Subject to availability
Multiple tariffs to suit your business
Account fee
FREE for first 3 months then £12.50 per month + an application fee of £55
Opening time
4 hours
Bank transfers
£0.30
Invoicing
closeOverdrafts
closeNo credit checks
Account fee
£25 per month
Opening time
1 day
Bank transfers
First 100 free then £0.20
Invoicing
doneOverdrafts
closeEcommerce: accept payments on your checkout page and with platform plugins
Account fee
Free. £20 sign-up bonus. T&Cs apply
Opening time
A few minutes, if you have a Revolut account already
Bank transfers
£0 (though recipient banking fees may apply)
Invoicing
doneOverdrafts
closeRevolut Pro is the all-in-one account for freelancers, side-hustlers, and sole traders
Account fee
from £29
Opening time
Within 1 week
Bank transfers
From 1 EUR
Invoicing
closeOverdrafts
close* Swoop’s service features a selection of providers from whom we receive commission.
banks selected For a personalised banking and saving report tailored to your business, simply register and securely integrate your bank account through our Open Banking technology.
Register your business with Swoop and integrate your bank account for your personalised report
If you’re a sole trader in the UK, opening a business bank account can help you manage your everyday business financial transactions, as well as benefit from specialist services and tools to help you run your business more smoothly.
We explain how sole trader bank accounts work and how to find the best solution for your business.
A sole trader is someone who is self-employed and runs their own business as an individual. A sole trader has complete control over their business and can keep all of the business’s profits after tax has been paid. However, unlike owners of a limited company, sole traders are also personally responsible for any losses the business makes.
Sole traders can include some freelancers and contractors, as well as certain tradesmen such as plumbers, plasterers and electricians. Although sole traders operate the business on their own – and many choose to work alone too – sole traders can also hire staff.
Sole trader bank accounts are simply regular business bank accounts. They work in a similar way to personal bank accounts and are offered by many high street and challenger banks. Sole trader business accounts can offer a variety of free tools and services such as accounting software or invoicing support.
Businesses that have been set up as a limited company in the UK and are registered with Companies House are legally required to open a business bank account.
In comparison, there is no legal obligation for sole traders to have a separate bank account which means they can use their personal bank account for business needs if preferred.
However, it’s worth noting that some banks may specify your personal current account needs to be for personal use only and could threaten to close your account if they spot a large number of business-related transactions.
There are a number of benefits to opening a separate bank account if you’re a sole trader. For a start, keeping your business’s income and expenditure separate from your own can make it much easier when it comes to completing your tax return.
Having a separate account can also make it easier to monitor the cashflow of your business, allowing you to easily see when invoices have been paid or when you have paid suppliers. A dedicated bank account also makes your business appear more professional to clients as invoice payments can be made into an account under your business name rather than your own name.
Additionally, a business bank account can help you build a credit rating for your business which will be beneficial if you later need to apply for a business credit card or loan.
To open a sole trader bank account, you’ll usually be asked to provide proof of ID, such as a passport or driving licence, as well as proof of address, such as a utility bill, recent bank statement or mortgage statement. If you’re applying via a digital bank you may be asked to upload photos of your ID and record a short selfie video for identification purposes.
You may also need to provide:
It is possible to open a sole trader bank account if you have poor credit, but your options are likely to be more limited. Many banks will run a search on your credit history when you apply and if your credit score is low, you may be turned away.
Some app-based providers, however – such as Anna and Cashplus – do not run a credit check as part of the application process and can therefore be worth considering if you have bad credit. These business accounts work in the same way as regular business accounts, but you will usually find you won’t be offered an overdraft as this is a form of credit.
The best bank account for a sole trader will depend on your personal circumstances, the type of business you run and how you plan to use the account.
To ensure you’re getting the right deal, it’s important to shop around using our business bank account comparison tool and select the features most important to you – whether that’s the number of branches, an overdraft, foreign exchange and so on.
Once you’ve compared your options and found a sole trader bank account you’re happy with, simply click through to complete the online application form. If you’ve chosen a digital, app-based provider, opening your account should be quick and easy to do online and you can often be up and running the same day.
In August 2023 the BVA BDRC published the findings from its Business Banking Service Quality survey. Undertaken as part of a regulatory requirement and published at the request of the providers and the Competition and Markets Authority, the study surveyed 18,000 SME bank account customers between July 2022 and June 2023.
Each customer was asked how likely they would be to recommend to other SMEs –
The results show the proportion of customers of each provider, among those who took part in the survey, who said they were ‘extremely likely’ or ‘very likely’ to recommend each service. A detailed breakdown for each category can be seen in the table below.
Source: BVA BDRC
Written by
Rachel has been writing about finance and consumer affairs for over a decade, helping people to get to grips with their finances and cut through the jargon. She's written for a range of websites and national newspapers including MoneySuperMarket, Money to the Masses, Forbes UK, and Mail on Sunday. Rachel has covered almost every financial topic, from car insurance and credit cards, to business bank accounts and mortgages.
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