How to open a UK business bank account

The UK is the easiest of these five markets by a wide margin. Accounts open in an afternoon, several are genuinely free, and a limited company with one director and no trading history is an ordinary customer rather than a compliance problem. That inverts the question: when price is close to zero everywhere, the thing worth comparing is not cost but who is holding your money and what stands behind it.

This guide covers who is actually obliged to have a business account (limited companies effectively yes, sole traders no), the difference between a bank and an e-money institution — which is not a technicality when something goes wrong — and what you give up if your account is not a UK one.

Updated 5 September 2026 Prices checked 5 September 2026

Opening the account, step by step

Incorporate, or establish that you do not need to
A limited company must exist before it can hold an account. A sole trader does not need to incorporate at all. If you are forming a company anyway, Tide is an authorised Companies House formation agent and files the registration alongside opening the account rather than making it a separate errand — a charged service, and one that takes single-shareholder companies only.
Time required: 24 hours for a Companies House filing
Decide between a bank and an e-money firm
Both give you a working sort code and account number. They differ in what happens to your balance if the provider fails, and in whether the account can ever come with an overdraft or a loan. Settle this before comparing tiers.
Apply to two providers in parallel
Applications are quick and mostly free, and declines are common enough to plan around — particularly for a company with a non-UK director or an address that is a formation agent’s. Two open applications cost you an hour and save you a fortnight.
Time required: Under an hour each
Complete identity and business checks
Expect ID and a proof of address for every person with significant control, the company number, and a specific description of what you sell. A vague answer here is the usual reason an otherwise clean application sits in review for a week.
Time required: Minutes to several days
Point HMRC and your payment processors at it
Corporation tax, VAT and any PAYE refunds settle against the details HMRC holds. Update your card processor and any direct debits at the same time — an account nobody has been told about is not doing anything for you.
Time required: Same day

UK business accounts compared

Every figure below comes from the provider’s own pricing page rather than a comparison site, and is re-checked quarterly. All three issue a real UK sort code and account number, so the local-details column is settled and the differences are elsewhere.

One provider on this list has a free tier; one charges a monthly fee from the entry plan up; one charges once and then nothing. Which is cheapest depends entirely on how many payments and conversions you actually make in a year.

Provider	Opening fee	Monthly fee	Local account number	Best for
Tide	Free	Free – £69.99	Yes	UK sole traders and small Ltds
Revolut Business	Free	£10 – £90/month	Yes	Multi-currency operations
Wise Business	£50one-off	Free	Yes	Cheapest currency conversion

Providers that accept UK companies · Prices checked 5 September 2026.

The providers worth applying to

These three cover the great majority of UK cases. Read the regulatory line on each card carefully — it is the shortest description of what you are actually buying.

Tide

UK sole traders and small Ltds

The default for a sole trader or a small limited company: a free tier that is genuinely usable, UK sort code and account number, and — if you have not incorporated yet — a Companies House formation service alongside the account, since Tide is an authorised formation agent. That part is charged and it only handles companies with a single shareholder. Tide is not a bank — it is an e-money firm, and the FSCS protection attached to the account comes from ClearBank holding the money rather than from Tide.

Opening fee: Free
Monthly fee: Free – £69.99
Local account number: Yes

Free £0, Smart £12.49, Pro £27.49, Max £69.99 per month on monthly billing. The tier names changed — the old Plus and Cashback plans no longer exist. 0.5% cashback is now a Max-plan feature. UK sort code and account number.

Regulatory status: Tide Platform Limited is not a bank — it is an FCA-authorised e-money institution (FRN 900843); Tide current and savings accounts are powered by ClearBank Ltd (FRN 754568) and eligible deposits are protected up to £120,000 per depositor by the FSCS across all ClearBank accounts

No partner agreement — listed for completeness

Revolut Business

Multi-currency operations

Open an account

The choice when the company deals in more than one currency or needs spending controls across a team. Onboarding is fast and the UK entity issues local details. There is no longer a free plan in the UK, so the entry tier is a real monthly cost weighed against tools a free account does not have.

Opening fee: Free
Monthly fee: £10 – £90
Local account number: Yes

Basic £10, Grow £30, Scale £90 per month; Enterprise is quoted individually. The UK is one of the seven countries where Revolut Business issues a country-specific account, so UK local details are available. There is no longer a free plan. Since 11 March 2026 Revolut Bank UK Ltd holds a full UK banking licence and UK accounts (including Business) are being migrated onto it, extending FSCS protection up to £120,000 to migrated accounts.

Regulatory status: EEA accounts are issued by Revolut Bank UAB, a Lithuanian bank licensed by the ECB and supervised by the Bank of Lithuania. UK accounts have been issued by Revolut Ltd, an FCA-authorised e-money institution (FRN 900562); since Revolut Bank UK Ltd exited mobilisation and received full PRA/FCA bank authorisation on 11 March 2026 (Financial Services Register No. 981170), Revolut has been migrating UK accounts — including Business accounts — onto it, with eligible deposits on migrated accounts protected by the FSCS up to £120,000. Which entity holds a given UK account depends on migration status.

Wise Business

Cheapest currency conversion

Open an account

One one-off charge for account details in a long list of currencies, then no monthly fee at all. The GBP details are properly local — they take Faster Payments, Bacs and CHAPS from inside the UK. It is the cheapest way to be paid in dollars or euros and the wrong tool if you want cards, credit or a relationship.

Opening fee: £50
Monthly fee: Free
Local account number: Yes

One-off £50 for account details in 22 currencies; no monthly or holding fee. GBP details are genuinely local — they take Faster Payments, Bacs and CHAPS from within the UK.

Regulatory status: Wise Payments Limited, an FCA-authorised electronic money institution (FRN 900507); balances are safeguarded rather than covered by a deposit-guarantee scheme

Who is actually required to have one

A limited company must have its own account. Not because a statute says “open a bank account”, but because the company is a separate legal person: its money is not the director’s, and paying company income into a personal account is a director’s loan every time it happens. Government guidance states the position plainly — limited companies must have a business bank account.

A sole trader or ordinary partnership is not legally required to have one. The money is yours in law, and no rule forces a separate account. Two things push against that anyway: bank terms, which usually reserve personal accounts for personal use, and self-assessment, which is dramatically easier when the business transactions live in one place.

Given that a free account exists here, the argument for running a sole trade through a personal account is weak on its own terms. In Denmark or Sweden it is a decision about cost. In the UK it is a decision about tidiness, and the tidy option is free.

Sort code and account number, or an IBAN?

In the UK this is barely a question, because every provider worth listing gives you a real sort code and account number. Domestic payments run over Faster Payments, direct debits collect over Bacs, and salary and HMRC payments behave exactly as a customer expects. That is not true of the equivalent providers in Denmark or Sweden, where the same brands hand you a foreign IBAN and a conversation on every invoice.

The place a non-UK account bites is not the payment rail but the counterparty. UK customers paying an overseas IBAN encounter a slower, occasionally charged transfer and a form field that expects eight digits and a sort code. Some payroll systems and card acquirers will not settle to a non-UK account at all.

If you run a UK company from abroad, this is the one argument that overrides convenience: take the UK details. They are available for free or close to it, and the friction they remove is daily.

Why UK accounts are free when European ones are not

The costs are the same everywhere — identifying beneficial owners, monitoring transactions, filing reports. What differs is who pays for them and how much competition there is for the privilege.

The UK combination is unusual: a well-established route to being regulated as a payments or e-money firm without holding a full banking licence, agency banks that let a new entrant reach Faster Payments without building it, and a decade of competition policy actively pushing small-business banking open. The result is a market where a dozen credible providers chase the same small companies, and the entry price has been competed to zero.

The catch is the usual one. Free means no monthly fee. Cash deposits, international payments, currency conversion and anything approaching credit are charged, and a free tier is designed around a company that will eventually need something it does not include. That is a fair deal, not a trick — but price your own year before assuming free is cheapest.

What a high-street bank still offers

Cash and cheques. If your takings arrive as notes, a branch network is not sentiment — it is the only mechanism, and the app-based providers either cannot help or route you through a third-party deposit arrangement with its own fees.

Credit. An overdraft, an invoice facility or a loan comes out of a bank’s view of an account it has watched for a couple of years. E-money firms are structurally not in that business, and the ones edging into lending are doing it through partners.

Introductory free periods are the third argument, and the weakest: they end, they renew into a monthly fee, and the fee is usually higher than the permanently free alternatives. Take one for the cash handling or the credit relationship, not for the first twelve months.

Frequently asked questions

Can I use my personal bank account for my business?

A limited company cannot — the company’s money must sit in the company’s name, and paying it into a director’s personal account creates a director’s loan with tax consequences. A sole trader legally can, but most banks’ personal terms prohibit business use and they do close accounts over it. Since free business accounts exist in the UK, there is little left of the argument for mixing them.

Do sole traders need a business bank account?

Not by law. Government guidance is explicit that sole traders and ordinary partnerships are not legally required to have one, while limited companies are. The practical case is still strong: self-assessment, evidencing expenses, and staying inside your bank’s terms.

Is Tide a bank?

No, and it says so itself. Tide Platform Limited is an FCA-authorised e-money institution; the current and savings accounts are powered by ClearBank, and the FSCS protection that applies to eligible deposits comes from ClearBank holding the money. The provider card above carries the full regulatory wording, including the current protection limit. The distinction matters if the provider ever fails — not in day-to-day use.

Is my money protected in a UK business account?

It depends on who holds it. Deposits with a UK bank are covered by the FSCS up to the published limit per depositor per banking group. Money held by an e-money firm is not a deposit: it is safeguarded, or placed with a partner bank, and any FSCS cover comes from that bank. Check the regulatory line on the provider you are considering, and note that the limit applies per banking group — two accounts behind the same bank do not double it.

Why are UK business accounts free when Danish and Swedish ones are not?

Competition, mostly. The UK has a well-worn route to being authorised as a payments or e-money firm, agency banks that give new entrants access to the payment rails, and years of policy aimed at opening small-business banking up. A dozen providers compete for the same small companies, and the entry price has been competed away. In Denmark and Sweden a handful of incumbents face no such pressure.

What are the disadvantages of a non-UK bank account?

Slower and occasionally charged incoming payments from UK customers, payment forms that expect a sort code, and payroll or card-acquiring systems that will not settle to a foreign account. Since UK local details are available free or near-free, there is rarely a reason to accept any of it.

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

Often the same day, sometimes minutes. It stretches to a week or more where there is a non-UK director, a formation agent’s address, or an industry that triggers extra checks. Incorporation at Companies House is generally the faster half of the process.

Opening the account, step by step

Incorporate, or establish that you do not need to

Decide between a bank and an e-money firm

Apply to two providers in parallel

Complete identity and business checks

Point HMRC and your payment processors at it