Business Bank Accounts for Cafes

Get your café finances set up right

Opening a café is exciting, but the money side needs solid foundations from day one. A dedicated business bank account keeps trading money separate from your personal spending, which supports clean bookkeeping, easier tax returns and a smoother time if you ever sell the business. In the UK, limited companies are expected to use a business account, and even sole traders quickly find a separate account saves stress and time.

Today’s options include digital-first accounts you can open on your phone and traditional high street banks with robust cash-handling. The right choice depends on how your café takes payments, how much cash you deposit and how you plan to grow. We will walk through the essentials in plain English so you can choose confidently.

Good banking does not just store cash - it helps your café run better every day.

Who will find this useful

If you are launching a coffee shop, converting a market stall into a fixed site, or upgrading from a personal account as your takings grow, this guide is for you. It suits UK sole traders and limited companies, including owners who rely on card payments, operate cash-heavy counters or plan to expand to a second location within the next few years.

What a café business account actually does

A business current account is your café’s financial hub. It separates company takings from personal spending, which makes bookkeeping, VAT and tax filings more straightforward. Lenders and investors expect to see clean, independent records, so separating finances also supports future funding applications. Many modern accounts integrate with tools like Xero, QuickBooks or Sage to categorise transactions automatically, attach receipts and produce simple reports.

Digital providers often include in-app support, instant notifications and the ability to open an account in minutes. High street banks typically bring cash-handling services, local branches and familiar processes. Either way, most fully regulated UK business accounts come with FSCS deposit protection up to £85,000 per eligible depositor per bank, which is an important safeguard for your working capital.

How to choose and get set up

Start by mapping how your café takes payments. If most sales are via cards or mobile wallets, a digital-first account with no monthly fee and free UK transfers may keep costs low. If you handle lots of notes and coins, look closely at cash deposit charges via the Post Office or PayPoint and consider a high street bank with tailored tariffs.

When applying, have documents ready: proof of ID and address for each owner or director, your trading address, Companies House details if incorporated, expected turnover and VAT status. Many providers complete checks electronically, but some may ask for extra paperwork. After opening, integrate your account with your bookkeeping software, set up feeds to your point-of-sale and ring-fence money for VAT, rent and payroll in separate pots or sub-accounts.

A few hours of setup can save you many hours each month in reconciliation and admin.

Next steps you can take today:

• Shortlist two digital providers and two high street banks.
• Compare cash deposit fees per £100 and monthly charges.
• Check integration with your POS and accounting tool.
• Confirm FSCS protection and eligibility for your business type.

Why the right bank choice matters for cafés

Choosing well reduces fees, saves time and strengthens your financial story. Clean, separate accounts simplify HMRC compliance and make it easier for your accountant to prepare accurate returns. If you plan to refurbish, add seating or open a second site, lenders will look for evidence of stable income, tidy statements and disciplined cash management. The right provider can integrate payments, bookkeeping and budgeting so you always know where your café stands.

FSCS protection also matters. Understanding the £85,000 limit per eligible depositor per bank helps you decide whether to spread funds, especially when holding cash for equipment purchases or a new site. Some providers also offer free-banking periods or interest on balances, which can help cashflow in your first year.

Quick view: benefits and trade-offs

Pitfalls and fine print to watch

Look closely at cash deposit costs. Some accounts charge per £100 deposited or a flat fee per transaction via the Post Office or PayPoint. For a cash-heavy counter, those fees add up quickly and can quietly eat into margins. Also check card settlement times, foreign transaction costs for suppliers, and charges for CHAPS if you occasionally need same-day large payments.

Confirm FSCS eligibility for your business type and understand how limits apply. Sole traders using the same bank for personal and business funds share one £85,000 limit, while limited companies can have separate limits. Review introductory free-banking periods so you know what the tariff becomes after month 12. Finally, ensure your provider supports your POS and accounting stack to avoid manual workarounds.

If you count a lot of cash at closing time, prioritise a bank that treats cash deposits fairly.

Sensible alternatives if you are not ready to commit

1. Open a digital account for day-to-day card takings, plus a secondary high street account purely for cash deposits.
2. Use multiple pots or sub-accounts to separate VAT, payroll, rent and refurbishment funds.
3. Explore providers that bundle same-day company registration with instant accounts and basic bookkeeping tools.
4. Keep your existing bank for stability while trialling a new provider for one site or a pop-up.
5. If you are pre-trading, open a basic business account first, then upgrade once turnover patterns are clear.

Frequently asked questions

Do I legally need a business account for my café?

Limited companies are expected to use a business account. Sole traders are not legally required to, but a separate account is strongly recommended once turnover grows, as it simplifies bookkeeping and tax.

Are digital business accounts safe for cafés?

UK digital banks that are fully regulated provide FSCS protection for eligible deposits up to £85,000 per bank. Always verify the provider’s regulatory status and how protection applies to your business type.

What documents will I need to open an account?

Typically passport or driving licence and proof of address for each owner or director, your trading address, Companies House details if incorporated, expected turnover and VAT information if relevant.

We take lots of cash. Which banks suit us?

High street banks often offer clearer cash-handling tariffs and branch support. Compare per £100 deposit fees and any monthly charges against your likely weekly cash totals.

Can I hold more than one business account?

Yes. Many cafés use multiple accounts or sub-accounts to ring-fence VAT, payroll and refurbishment funds. This can improve budgeting and demonstrate financial discipline to lenders.

How Switcha supports your decision

Switcha will connect you with the best options for what you are looking for. We compare UK business banking features, fees and integrations for cafés so you can shortlist with confidence. Our guidance is clear, impartial and focused on helping you set up an account structure that fits how your café really operates.

Important reminder

This guide provides general information, not financial or legal advice. Banking eligibility, fees and features change regularly. Always check current terms with providers and seek professional advice tailored to your café’s structure, turnover and plans before making decisions.