How to open a business bank account in the UK

Zorica Lončar
10.06.22
7 minute read

If you’re setting up a new business, one of the first things to look into is getting a business bank account.

In this guide, we’ll cover everything you need to know on how to open a business bank account in the UK. This includes types of accounts, costs to consider and a step-by-step guide to the process. Plus, a look at the best business bank accounts in the UK, including Wise Business.

So, let’s get started.

Does my business need a business account?

Not every type of business needs a dedicated business account. Although there are benefits to having one, which we’ll look at in just a moment.

The one key exception is if you run a limited company in the UK and have registered it at Companies House. A limited company is a legally separate entity from you, so you’re required to have a separate bank account¹.

You don’t need a business bank account if you are:

  • A sole trader
  • A freelancer
  • Doing gig work.

What are the benefits of having a business account?

One of the main advantages of having a dedicated business bank account is that it allows you to keep your personal and business finances separate. Your bank may also place limitations on what you can do with a personal account, so upgrading to a company account can give you more options and allow your business to grow.

Further benefits of setting up a business bank account include:

  • Saving on admin time when it comes to submitting tax returns to HMRC
  • Helping you build a credit rating for your business
  • Giving you access to business tools, resources and support, along with finance and credit
  • Making your business appear more professional to clients and customers.

Can I open a business bank account in the UK as a non-resident?

There aren’t any laws or restrictions preventing non-residents from opening a business bank account in the UK². However, it may not be as straightforward as it would be for UK residents.

You might find that most banks will require company directors to be actually living in the UK when they apply. This is down to the UK’s strict anti-money laundering regulations, which can make it difficult for banks to accept applications from overseas business owners².

Your best chance is with one of the major UK banks, such as NatWest or HSBC (which has an international presence).

You can also try digital providers such as Revolut³ or Tide⁴. These mobile banks only require the business to have a physical presence in the UK³, or have a company registered with the UK’s Companies House⁴, in order to open a business bank account. You don’t actually have to live in the UK to be eligible.

The last option to explore is opening an international account, one which accepts GBP along with other currencies your business trades in.

Can I open a business bank account in the UK with a foreign corporate entity?

It can be quite tricky to open a bank account in the UK for a foreign corporate entity. But if you already bank with a large global institution in your home country, you may find that they can help you set up an account with their UK business.

Your first port of call should be some of the UK’s major banks, such as HSBC, Lloyds, Barclays and Natwest. These are more likely to offer international accounts, along with specialist UK business bank accounts for non-residents.

If you need a more flexible and quick to open business account, you could benefit from a Wise Business account.

Types of business accounts to open

There are a variety of different business bank accounts to choose from, depending which bank you go for. Most fall under the following categories:

  • Startup business bank accounts. These are usually for new or small businesses, or for freelancers and sole traders. Some come with a fee-free period and business support tools, to help you get your venture off the ground.
  • Business bank accounts for growing and established companies. These accounts are often categorised by turnover, with limits and charges based on the size of your business.
  • Community and not-for-profit accounts. If you run a charity, social enterprise, club, school or other non-profit, most UK banks offer a dedicated everyday account with low or no fee banking.

Many banks also offer multi-currency accounts, for businesses wanting to trade overseas.

Can you open a business bank account in the UK with a bad credit history?

It can be difficult to open a business bank account in the UK with a bad credit history, but it’s not impossible. If you have a detailed business plan, you may be able to make a convincing case for your suitability as an applicant by arranging a meeting with your chosen bank⁵.

Most banks will carry out credit checks, but not all do. Digital banking solutions such as ANNA⁶ and Tide⁷ only carry out ‘soft’ credit and identity checks to comply with UK anti-laundering regulations. This could mean your application stands a greater chance of success, even if you have a poor credit history.

Alternatively, some UK high street banks may offer ‘basic’ bank accounts, designed for applicants with a bad credit score.

Best business bank accounts in the UK

Ready to open your UK business account? Let’s run through a few of your options, at high street and digital banks. These are some of the best UK business accounts according to an independent 2021 survey by business insight consultancy BVA BDRC⁸:

Starling Bank Business Current Account

Voted the best for service quality, online banking and overdraft services⁹, Starling Bank is a digital-only fintech solution used by over 450,000 UK businesses¹⁰.

The Starling Business Current Account is FSCS regulated and offers 24/7 customer support via app, email or phone. It’s free to use with no monthly fees, although you can customise it with paid-for extra features such as invoice creation or HMRC tax calculation¹⁰.

The free digital-only account is for sole traders, Limited Companies and LLPs. It comes with the following standard features¹⁰:

  • A Mastercard debit card
  • Multi-director access
  • Integration with accounting tools
  • Receipt capture for tracking expenses.

Metro Bank Business Bank Account¹¹

Voted best for branch service (especially outside of ordinary working hours), Metro Bank offers a Business Bank Account for sole traders and limited companies with annual turnover of less than £2 million.

The Metro Bank Business Bank Account offers simple pricing, 24/7 support and a handy app to manage your money on the move. Other key account features include:

  • Dedicated local business manager
  • Smart business and accounting tools
  • Business debit card.

Santander Business Current Account¹²

The Santander Business Current Account is one of the best bank accounts for startups, with 18 months of fee-free everyday banking. Features include:

  • Arranged overdraft
  • Online and mobile banking
  • Business debit card.

Santander is currently only accepting applications from existing customers looking to open a new business account.

Barclays Business Current Account¹³

Barclays offers a range of business current accounts to suit companies of all kinds, from startups to larger established businesses.

Its Business Bank Account for turnover up to £400k offers easy everyday banking for established small to medium sized companies. You can take your pick from two price plans, and get full support from a UK-based Business Direct team.

When you open a business bank account with Barclays, you’ll also get the following features:

  • Free invoicing and accounting software
  • Online and mobile app banking
  • Access to payments, expansion and cashflow support.

How to open a business account online

You can apply for a business account online in most cases¹⁴, either starting your application from scratch or using the Current Account Switch Service. This has the benefit of guaranteeing that the switch will be complete within 7 days¹⁴. Some banks may require you to visit the branch in person to verify your ID or provide further information.

To apply for a business account online, you’ll usually need to provide¹⁴:

  • The details of all partners, directors or members of the business - including recent home addresses
  • Full details of your business, including contact details and trading/registration addresses in the UK
  • Details of your company’s cash flow or forecasts
  • Your registered company number with Companies House (limited companies only).

You’ll also need to be 18 or over, and the owner or director of the business, in order to apply for a UK business account.

It’s a good idea to check the requirements to open a business bank account from your particular bank before starting the process. So, head to your chosen bank’s website for details of the documentation and details you’ll need, or give the bank a call. You can find information about the Current Account Switch Service here.

How long does it take to open a business bank account?

It can take as little as 7 days if you use the Current Account Switch Service, but it could take anywhere from 4 weeks to 3 months otherwise¹⁵.

How much does it cost to open a business account?

Opening a business bank account shouldn’t cost you anything, but there are usually monthly fees to pay once you’re up and running. If you’ve chosen a startup account, you may benefit from a fee-free period. It’s always worth checking and comparing the fees between business bank accounts very carefully before starting the application process.

To give you an idea of the fees involved with having a UK business bank account, let’s compare costs between some of the most popular providers - including Wise Business.

Starling Bank¹⁶Metro Bank¹⁷Santander¹⁹Barclays (two price plans available)²⁰Wise Business
Monthly fee£0None - for balances of £6,000+ £6 - for balances below £6,000Free for 18 months, £7.50 afterwards£8 - £8.50one-off fee²¹
Send/receive money within the UKFree£0.30 each (30 free a month for balances of £6,000+)Free£0 to £0.35£0.32 fixed fee
Send money internationally0.4% + local fees + £5.50 for SWIFT payments£0.20 for SEPA payments £25 for SWIFT paymentsFree for SEPA payments, £25 for SWIFT payments£0.35 for SEPA payments £15 for other international paymentsFrom 0.41% (varies by currency)²²
Receiving money from abroadFree for GBP, 2% for EURCharges apply¹⁸ - contact bankUnavailable - contact bank£6Free in 10 major currencies

Wise - a quick to open business account without borders

If you're a business who is tapping into the global market or simply needs to pay vendors and suppliers abroad, you could benefit from a money saving business account with Wise.

Wise offers:

  • No monthly fees - just one-off fee upon registering
  • No FX mark-up
  • Quick to open and fully online
  • Receive international payments
  • Up to 8x cheaper than banks
  • Hold money in different currencies

Join Wise today

Summary

So, that’s pretty much it - all the essentials you need to know on how to open a business bank account in the UK.

If you’ve got your paperwork in order and the right details to hand, it should be relatively straightforward. Good luck!


Sources used for this article:

  1. Gov.uk - limited company formation
  2. Finder - business bank accounts for non UK residents
  3. Revolut - physical presence
  4. Tide - Tide
  5. Small Business - opening a business bank account with bad credit
  6. ANNA - business account
  7. Tide - credit checks
  8. BVA BDRC - business banking
  9. Simply Business - best business bank accounts
  10. Starling Bank - business account
  11. Metro Bank - business current account
  12. Santander - business current account
  13. Barclays - business current account
  14. Natwest - startup bank account
  15. Great.gov.uk - open a UK business bank account
  16. Starling Bank - business banking fees
  17. Metro Bank - business bank account
  18. Metro Bank - business customers
  19. Santander - business current account key facts document
  20. Barclays - business current account
  21. Wise - send money
  22. Wise - Wise Business fees

Sources checked on 30-05-2022.


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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