Business Bank Accounts for Handymen

Getting set up with the right account

If you work as a handyman in the UK, your bank account choices affect more than convenience. The way you handle payments, materials costs and tax records can either cut your evening admin or create it. For sole traders, a business account is not a legal must, but it is a practical step that keeps HMRC ready records clean and helps you claim allowable expenses without stress. If you trade as a limited company, a separate business account stops being optional and becomes a basic compliance step because the company is a distinct legal entity.

Think about how you get paid, how often you deposit cash, and whether you need tools like invoicing, receipt capture and accounting integrations. Many modern providers bundle these features so your account acts like a mini back office. Others focus on in‑branch support, which can help if you want face‑to‑face advice or pay in cash regularly.

The right account should save you time, reduce errors at tax time, and protect your money appropriately.

Who this guide will help

This guide is for UK handymen and small property maintenance businesses at any stage, whether you are pricing your first jobs or already juggling repeat clients. It is especially useful if you are deciding between staying a sole trader or forming a limited company, and want a banking setup that matches how you actually work day to day.

What a business account does for a handyman

A business bank account separates your work money from personal spending. That means job income, materials, fuel and card reader settlements land in one place, ready to reconcile. Clean separation reduces the risk of missed deductions and messy statements when you file a Self Assessment or produce company accounts.

Most UK business accounts at fully licensed banks include protection from the Financial Services Compensation Scheme up to £120,000 per banking group. Sole traders usually share this limit across personal and business balances at the same bank. Limited companies typically benefit from their own separate limit. Some app‑based or e‑money providers safeguard funds in segregated accounts rather than using FSCS. The money is kept separate from the provider’s own funds, but the protection mechanism is different.

You will also see real‑world features that matter to trades: integrated invoicing, instant notifications when a client pays, and easy links to tools like Xero, QuickBooks or FreeAgent. For many handymen, these extras turn banking into a time saver rather than a chore.

How to choose and open an account

Start by mapping your usage. If most customers pay by bank transfer or card and you rarely bank cash, an app‑first provider with low fees and built‑in tools can be ideal. If you handle frequent cash or want in‑person support, a high‑street bank may suit you better, particularly for services like cash deposits and lending.

Opening an account is straightforward when you prepare documents in advance. Expect to provide proof of identity such as a passport or UK driving licence, and proof of address like a recent bank statement or utility bill. You will also need basic business details, including your trading address, expected turnover and, if you are a limited company, your Companies House number. Some digital providers may ask for a smartphone and a short description or evidence of your trade. Sole traders usually pass through quicker checks. App‑based accounts can often approve you the same day, while traditional banks may take longer, especially if extra checks are needed.

Next steps you can take today:

• List your typical monthly transactions: transfers, cash deposits, card payments
• Note any tools you already use, like accounting software
• Decide if you need lending soon, such as a van loan or overdraft
• Shortlist two digital providers and one high‑street bank and compare fees below

Why separating money is worth it

Mixing personal and business spending makes bookkeeping slower and more error prone. A separate account ring‑fences every materials receipt and fuel purchase so you can claim what you are entitled to and respond confidently if HMRC asks for evidence. Automation helps too. Many accounts categorise expenses, store photos of receipts and sync with bookkeeping software. For a handyman who buys small items often, those features quickly add up to hours saved and fewer missed claims.

Safety matters as well. Understanding FSCS limits helps you decide where to hold client deposits or materials money. Sole traders should remember that personal and business balances at the same bank typically share the same FSCS limit. Limited companies usually have their own limit, separate from the directors’ personal protection. If you prefer a provider that safeguards rather than uses FSCS, check exactly how your funds are protected and how you would get them back if the firm failed.

Traditional vs digital at a glance

Quick tip: If you rarely handle cash and value instant notifications, digital often wins on price and convenience.

The upsides and trade‑offs

Checks before you apply

Look closely at how you get paid. If your clients still use cash or cheques, make sure deposit routes and fees are workable. Post Office deposit charges or percentage fees can add up across a year. Confirm whether the provider offers FSCS protection or safeguarding and what that means for you as a sole trader or limited company. Review transaction fees after any introductory free period, including charges for international payments, CHAPS and paying in cash. If you expect to seek lending soon, assess the bank’s track record with overdrafts, vehicle finance and small business loans. Finally, ensure the account supports your legal structure. Some providers do not yet serve all entity types.

Other routes you could consider

1. Stay as a sole trader with a freelancer‑friendly account that has no monthly fee and strong invoicing tools
2. Form a limited company and open a high‑street business account to access lending and branch services
3. Use a contractor‑style digital account with tax pots and receipt capture for low transaction volumes
4. Keep a traditional bank as your main account and add a digital account for on‑the‑go invoicing and notifications
5. Pair your account with dedicated accounting software like Xero, QuickBooks or FreeAgent for deeper reporting

Common questions, answered

Q: Do I legally need a business account as a handyman? A: Sole traders are not legally required to have one, but it is strongly recommended. Limited companies and LLPs must use a separate business account because the business is a separate legal entity.

Q: How safe is my money? A: Accounts at fully licensed UK banks are typically protected by FSCS up to £120,000 per banking group. Some fintechs use safeguarding instead of FSCS. Check your provider’s status.

Q: Will a business account make tax easier? A: Yes. Separate accounts make bookkeeping cleaner, help you evidence expenses and reduce errors. Integrations with accounting software can automate much of the admin.

Q: How fast can I open one? A: Many digital providers can approve you the same day. Traditional banks may take longer, especially if extra checks are needed or your structure is more complex.

Q: What documents will I need? A: Typically photo ID, proof of address and basic business details. Limited companies also provide a Companies House number. Some providers may ask for information about your trade.

How Switcha fits in

Switcha will connect you with the best options for what you are looking for, whether that is low fees, strong cash handling or smart integrations. We compare trusted UK providers side by side so you can choose a business account that suits how you actually work, not just the headline rate.

Important information

This guide is general information, not financial or legal advice. Banking features and fees change, and eligibility depends on your circumstances. Always check current terms and protection details with the provider before you apply.