Best Business Bank Accounts for Sole Traders

Choosing a business bank account that works for you

Picking the right business bank account should feel straightforward, not stressful. As a sole trader, you want an account that keeps costs low, makes bookkeeping easier, and protects your money. In 2026, the best options combine mobile-first banking with smart tools like automated categorisation, invoicing, and seamless links to accounting software. That means less paperwork and more time to focus on customers.

Several UK banks and fintechs now suit different trading styles. From fee-free everyday banking to powerful multi-currency tools, there is a solid choice for most scenarios. The key is to match what you do day to day with the features that genuinely help. Get the essentials right first - fees, payments, and FSCS protection - then layer on extras only if they earn their keep.

Good business banking should quietly remove friction from your week.

Bottom line: clarity on fees and integrations will usually save you more than chasing flashy add-ons.

Who benefits most

If you trade in your own name, need to separate business and personal money, and want clean records for HMRC, a dedicated sole trader account is a smart move. It suits freelancers, contractors, side hustlers, and microbusiness owners who value simple fees, quick onboarding, and tools that make tax time easier.

What makes a strong sole trader account

A great account balances everyday usability with sensible costs. For many, Starling Bank stands out with no monthly fees, speedy digital onboarding, and integrations with popular accounting tools. If you invoice overseas or spend in multiple currencies, Revolut Business offers multi-currency accounts and robust expense features with plans starting from £10 per month. Prefer a high street name and branch access? HSBC Kinetic gives new customers 12 months of free banking, then fees apply depending on usage. Monzo Business focuses on clarity and ease, with FSCS protection up to £85,000.

Other options bring niche strengths. ANNA merges banking with invoicing and bookkeeping, while Mettle by NatWest offers a free account with built-in links to FreeAgent to help with Making Tax Digital. TSB’s Business Plus can reduce early costs with 30 months of free day-to-day banking, and Tide provides a free entry point with optional add-ons.

How to compare and apply with confidence

Start by listing what you do each week: card payments, cash deposits, international transfers, or simple UK invoicing. Then align features to needs. If you travel or bill abroad, look for low FX fees and multi-currency wallets. If you are UK-only, prioritise transparent pricing, slick mobile apps, and accounting integrations. Check payment limits, cash deposit routes, and whether you can issue multiple cards for expenses.

Applying is typically digital and quick. Have proof of ID, proof of address, and basic business details ready. Most providers run standard checks to verify identity and assess risk. If you are switching from another bank, look for a full switch service to move payments and balances with minimal hassle. Keep a record of all fees and limits in one place so there are no surprises later.

• Next steps:
  • Shortlist 2 to 3 providers that match your trading pattern.
  • Compare total monthly cost based on your actual usage.
  • Test the app experience before committing.

Why the right account matters

Your bank account underpins cash flow, compliance, and customer trust. With the right tools, you reduce admin, cut mistakes, and prepare clean records for HMRC. Digital-first banks now integrate directly with accounting software, helping you stay aligned to Making Tax Digital requirements. That means real-time visibility of income and expenses, faster reconciliation, and fewer end-of-year headaches.

Protection matters too. As a sole trader, FSCS protection covers up to £85,000 per authorised bank, but personal and business balances at the same bank share that single limit. Limited companies have separate protection across personal and business accounts. Knowing how protection applies helps you manage risk and decide if you should diversify balances.

Snapshot of popular options

Watch outs before you hit apply

Always check the full tariff, including ATM withdrawals, card replacements, cash deposits, and international transfers. Intro offers like free banking for 12 or 30 months are helpful, but factor in the cost once the promo ends. Review limits on payments and transfers, especially if you expect occasional high-value invoices. If you receive cash, confirm deposit methods and fees via Post Office or PayPoint networks.

Look at data exports and accounting integrations. Reliable syncing with tools like Xero, QuickBooks, or FreeAgent saves time and reduces manual errors. Confirm how card controls, receipt capture, and expense approvals work in practice. Finally, understand FSCS protection and whether your personal and business funds sit within the same bank licence. Splitting balances across providers can help you stay within limits.

Other routes if your first choice does not fit

1. Use an alternative e-money account with strong accounting integrations, then add a traditional bank later for FSCS protection.
2. Open a secondary account for international spending while keeping a primary UK account for domestic payments.
3. Consider a building society business account if you prefer in-branch service and local support.
4. Pair your bank with dedicated invoicing or accounting software to cover gaps in features.
5. Use a merchant account or payment service for card acceptance if your bank’s tools are limited.

Frequently asked questions

Q: Do I legally need a business account as a sole trader? A: It is not a legal requirement, but most banks require separate business accounts for business use. Separation also simplifies tax and bookkeeping.

Q: How does FSCS protection work for sole traders? A: You are covered up to £85,000 per authorised bank. If your personal and business accounts are with the same bank, the combined total shares that single limit.

Q: Which bank is best for keeping costs low? A: Starling and Mettle are strong fee-free options for everyday UK use. Tide also offers a free entry plan, while HSBC Kinetic and TSB provide lengthy introductory free periods.

Q: What if I need multi-currency support? A: Revolut Business is a good fit for invoicing or spending in multiple currencies, with expense tools and international payments. Check plan pricing and FX fees.

Q: Can I switch easily later? A: Yes. Many providers support switching services that move payments and balances. Keep records of your regular payees and subscriptions to ensure a smooth transition.

How Switcha supports your decision

Switcha will connect you with the best options for what you are looking for. We compare features, fees, and protections across leading UK providers, then highlight matches based on your trading pattern. No hard sell - just clear information so you can choose with confidence.

Important information

This guide is for general information only and is not financial advice. Always check current terms, eligibility, and fees with the provider. FSCS protection applies to eligible deposits at authorised institutions and limits can change.