UK business bank account: Types, cost and a step-by-step guide

If you are starting a new business, opening a business bank account is one of the most important things you can do.

Do you need this account?

Although a business account is not essential for every type of business there are some advantages to getting one. The only exception is if you already own and run a limited company in the UK that has been registered with Companies House. As a limited company is a legally separate entity from you, you must have a separate bank account.

Setting up a business bank account is not essential if you are a sole trader, freelancer or doing gig work.


One of the most significant benefits of having a business bank account is the ability to keep your personal and business finances separate. Your bank may also limit what you can do with a personal account, so switching to a business account can provide you with more choices and help your company to expand.

Some of the benefits of setting up a business bank account are:

  • When it comes to submitting tax returns to HMRC, you can save admin time.
  • Guiding you in establishing a credit rating for your company.
  • Providing you with business tools, resources, and assistance, as well as finance and credit.
  • Making your company more professional to clients and customers.

Types of business accounts:

Here are the different business bank accounts with their categories:

  • Startup business bank accounts - These accounts are only for start-ups, small enterprises, freelancers, and sole traders. Some accounts provide a free trial period and business assistance tools to assist you to grow your business.
  • Business bank accounts for established companies -These accounts are often categorised by turnover with limits and fees based on the size of your company.
  • Community and non-profit accounts - Most UK banks offer a dedicated daily account with minimal or no fees. These banks are perfect for you if you run a charity, social enterprise, club, school, or other non-profit organisation.

Several banks provide multi-currency accounts to companies looking for international trade. If you have bad credit, you can open a business bank account with several digital/mobile banks that don't require credit checks. 

How to open a business account online?

Some banks may require you to visit the branch in person to verify your ID or provide further information.

These are the requirements to apply for a business account online:

  • The details of all partners, directors or members of the company and their recent home addresses.
  • Complete information about your company, including contact details and trading/registration addresses in the UK.
  • Company’s cash flow or forecasts.
  • Company number of your company that is registered with Companies House.

Also, to apply for a UK business account, your age must be 18 or over, and you must be the owner or director of a company.

You must check the requirements for opening a business bank account from your particular bank before starting the process.


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