- Compare sole trader business bank accounts with NerdWallet
- A sole trader business account can streamline your finances and save you time
- As a sole trader, your bank may not let you use your personal account for business transactions
Sole trader bank accounts are there to help save you valuable time and effort as you endeavour to run your business. If you’re self-employed, working for yourself part-time or full-time, and haven’t registered your business as a limited company, you’re probably classed as a sole trader. And a sole trader current account could make your life easier. Choose from our selection of the best sole trader accounts below and apply today.
Our Top Sole Trader Bank Accounts
Our Best Sole Trader Account Providers
Each of these products may be one of a range offered by the provider. Always check terms & conditions for suitability before applying. Only affiliated products are shown. Other products are available. Read our guide to ratings.
Monzo Lite Business Account
Free
Free
Free
n/a
- Available to sole traders, or the director of a registered limited company by shares (Ltd)
- Must be based in the UK
NerdWallet's Review Summary
With its simple and well-received offering Monzo Business is a great option for anyone just starting out.
Monzo offers an array of business banking services that are useful to sole traders, including accounting software integration and its ‘tax pots’ feature. However, some features are only available to customers who pay the £9 monthly fee for Monzo’s Pro account, or the £25 charge for its Team account.
For further details, read NerdWallet’s Monzo Business Account Review.
Monzo key features:
- Speedy account opening: Most accounts are up and running on the same day as an application is made.
- FSCS protection: Deposits of up to £85,000 are protected by the Financial Services Compensation Scheme.
- Free UK transfers: Business banking customers can make unlimited free electronic payments in the UK.
- 24/7 customer support: Monzo’s in-app customer support is available at all hours for customers with urgent concerns.
NerdWallet's Pros & Cons
Pros:
- Monzo’s Business Lite account has no monthly fees and free bank transfers in the UK.
- Customers can manage their money online or via Monzo’s mobile app.
- Most customers receive access to online banking on the same day as they apply.
Cons:
- Customers cannot manage their accounts in-person, as Monzo does not offer telephone banking and has no branches.
- There are no Monzo accounts available to charities or partnerships.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Virgin Money M Account for Business
- Available for eligible businesses with up to £1m annual turnover
- Must be based and operated in the UK (excluding Channel Islands, Isle of Man and Northern Ireland)
- All owners, directors, senior managers and account signatories must be over 18 years old
NerdWallet's Review Summary
Virgin Money’s M Account for Business does not charge a monthly fee and is designed for start ups and small businesses with an annual turnover of less than £1 million. Account extras include cashback on debit card purchases, while customers can also apply for an overdraft.
For further details, read NerdWallet’s Virgin Money Business Account Review.
Virgin Money key features:
- Account extras: Perks include cashback when using the business debit card and discounts with selected retailers and merchants.
- FSCS protection: Deposits of up to £85,000 are protected by the Financial Services Compensation Scheme.
- Free everyday banking: Basic electronic transactions are free for customers with an M Account for Business.
NerdWallet's Pros & Cons
Pros:
- Virgin Money’s M Account for Business has no monthly fee.
- Cashback of 0.25% on business debit card purchases.
- Over a third of Virgin Money business customers have their account open on the same day as they apply, though the average account opening time is two days.
Cons:
- Virgin Money does not offer 24/7 customer support.
- The free M Account can only be opened by businesses with annual turnover of less than £1 million.
- Customers in the South of England, Wales or Northern Ireland do not have access to nearby branches.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
The Co-operative Bank Business Bank Account
NerdWallet's Review Summary
With ethical and sustainable practices at the forefront of the Co-operative Bank’s ethos, the provider could be attractive to business owners who prioritise social responsibility. There are also many different accounts to choose from, meaning there are options for a variety of businesses and charities.
For further details, read NerdWallet’s The Co-operative Bank Business Account Review.
The Co-operative Bank key features:
- FSCS protection: Your eligible deposits, up to £85,000 across all of your accounts, are protected by the Financial Services Compensation Scheme (FSCS).
- Borrowing: Borrowing options include an arranged overdraft, a charge card for expenses, a credit card, and business loans.
- Account management: Customers can manage their money online, over the phone, via the app and at a branch.
NerdWallet's Pros & Cons
Pros:
- Some accounts with the Co-operative Bank have no monthly service fee, including a small business account developed specifically for members of the Federation of Small Businesses.
- There are no transaction fees for basic electronic transactions, such as direct debits, standing orders, card purchases and ATM withdrawals.
- Borrowing options include a business overdraft, credit card, charge card and loan.
Cons:
- There is no 24/7 customer service available.
- Customers in Northern Ireland have no access to branches.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Barclays Business Account
- Must have an annual turnover between £400k- £6.5m
- Must have a straightforward and clearly defined ownership structure
- Must be at least 18 years old and be based and operate in the UK – including business owners
NerdWallet's Review Summary
This British high-street bank has specific accounts for startups, established businesses and charities or community groups. With branches all across the UK and considerable borrowing options, Barclays could be a great option if you prefer a traditional bank.
For more details, read NerdWallet’s Barclay’s Business Account review.
Barclays key features:
- Account access: Accounts can be managed online, via the app, over the phone, or at the wide range of Barclays branches.
- Credit facilities: Barclays offers a wealth of borrowing options, including loans, mortgages and overdrafts.
- FSCS Protection: Eligible deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons
Pros:
- There are a variety of different accounts for those in different circumstances, with accounts for start ups or more established businesses, as well as charities and community groups.
- Customers can enjoy free access to Freshbooks accounting software.
- Customers do not need to pay for basic transactions, such as direct debits and standing orders.
Cons:
- Barclays business accounts carry an £8.50 per month maintenance fee after the end of a 12 month introductory offer period.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Tide Business Account – Free
- For registered business accounts: Must be a director of a UK company registered with Companies House.
- For sole trader accounts: Must be a UK-based sole trader or freelancer with a valid UK home address and be registered with HMRC
- For all accounts: you must be aged 18+, have a valid UK phone number and address, and hold a compatible device registered to a UK App or Google Play store
NerdWallet's Review Summary
Tide offers four different business bank accounts, including an account with no monthly fee. The usual 20p fee for basic transactions is also waived for 12 months if you apply via NerdWallet. With accounting tools and POS functionality, Tide accounts might particularly appeal to merchants and other businesses with a need to take a lot of payments.
For more information, see NerdWallet’s Tide business account review.
Tide key features:
- FSCS protection: Your eligible deposits of up to £85,000 are protected by the Financial Services Compensation Scheme with a new Tide business account.
- Point of sale: Tide provides point of sale (POS) tools, including card reading machines, payment links and the ability to accept contactless payments via your iPhone.
- Business lending: Tide offers business loans of up to £20 million, as well as startup loans, asset finance and more.
NerdWallet's Pros & Cons
Pros:
- There is a free account available.
- Free bank transfers for 12 months when you apply via NerdWallet.
- Tide offers a wide variety of POS tools, which could help your business to quickly and easily take payments.
- Most accounts are set up in just minutes, though some more complex accounts can take a few days to open.
Cons:
- Tide does not offer a business overdraft.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
What is a sole trader bank account?
A sole trader bank account is a business account for people who own and run their business as a self-employed individual. Sole trader accounts work similar to a current account you’re likely to have for your own finances, but include features designed to help you save time, effort and sometimes money in the everyday running of your business.
Many providers allow sole traders to open standard business bank accounts, but some also offer accounts specifically designed for sole traders. These may have additional tools aimed at helping if you’re going it alone, including bookkeeping services and automatic invoice creation.
Do I need a business account as a sole trader?
There is no legal requirement for you to have a separate business bank account if you’re a sole trader. This raises the possibility of using your own personal bank account for your business finances if you wish and your provider allows.
But while this may seem a simple option in the short term, there are several reasons why having a standalone business account as a sole trader could help make your life easier overall.
Business owner insight
“I opened a business bank account early on – it instantly made me feel more professional. It helped me take my business more seriously, manage income and expenses clearly, and separate business activity from personal life. I’d absolutely recommend it to other sole traders for that reason alone.”
Cheryl Laidlaw, founder of London Web Girl and CeCe Digital
How could a sole trader account benefit you?
The main benefits of having a business bank account if you’re a sole trader include:
- Keep your finances separate: Having a clear distinction between your personal finances and your business finances will make it easier to keep on top of both.
- Simpler to monitor your business: You can see at a glance the exact financial state of your business, as all the payments received and made, and other income, outgoings and cashflow are in the one account.
- Saves time filing taxes: Bookkeeping and filing your taxes should be more straightforward as everything related to your business is in one place, separate from your personal finances. Accounting software is often included, or can be integrated, into accounts too.
- Helpful banking tools: Accounts often include access to payment, invoicing and payroll tools to help you with the day-to-day running of your business.
- Adds credibility: Having the name of your business on invoices and next to payments enhances credibility and looks professional to customers and suppliers.
- Designed for sole traders: The account features and support functions will have been included and designed with the needs of sole traders in mind.
- Options to borrow: It can be easier to access business loans and other credit options from a provider if you already hold a bank account with them.
- Build your business’ credit: Having a business account should help build your business’s credit score, giving you a better chance of securing credit in the future.
Finding the right sole trader bank account with NerdWallet
The best sole trader account for you will depend largely on your business and your needs as its owner. For instance, if a lot of the payments your business takes are in cash, you’ll probably need an account where there are minimal or no charges for banking your daily takings. Equally, you may find some accounts don’t accept cash deposits at all. While there are a few things you need to think about, making sure an account, and its features and fee structure, suits you and your business is key.
What you need to consider
- Fees: Business accounts sometimes have monthly fees, along with transaction fees and other charges for features, such as overdrafts. Estimate how much different accounts are likely to cost you and look for special offers where monthly fees are waived or there’s a set amount of free transactions before charges apply.
- Features: Always check the features that an account offers, and make sure they’re what your business needs. For example, not all accounts offer international banking, so finding one that does will be important if you regularly trade abroad.
- Tools: Look for accounts offering tools that your business is likely to find useful, such as automated invoicing tracking or the ability to integrate accounting software.
- Customer support: Some business accounts are entirely managed by app, while others offer phone and perhaps face-to-face support in a branch. Make sure you’re comfortable with the customer service options available.
- Eligibility: Check if there are any eligibility requirements your business must meet in order to open an account. These could include things such as a minimum trading history or turnover.
Tim Leonard, Lead Writer and Business Expert at NerdWallet
What our Nerds say…
“Handling a self-assessment tax return can often be challenging for sole traders, particularly if you’re new to running a business. Simply having a business bank account can make filing your return easier. But, an account with integrated or even free accounting software can make your taxes as simple as possible.”
How to open a sole trader bank account
Opening a sole trader account through NerdWallet couldn’t be easier.
- Find the account that best suits your business from the options above.
- Click the ‘See Deal’ button and you’ll be taken to your chosen provider.
- Apply directly with the provider – you don’t need to fill in any forms for us.
» Take me to: NerdWallet’s best sole trader accounts
What you’ll need
In order to open a business account most providers will need you to provide:
- Proof of your identity: your passport or driving licence
- Proof of your address: perhaps a recent bank statement, utility bill or council tax reminder
- Proof of your business’s address: also typically a utility bill or similar, but proving the trading address of your business (this could be the same as your home address if you run your venture from home)
- Contact details: both your own and for your business
- Business details: including the date you started trading, actual or forecasted turnover, and tax information
- Registration documents: your business tax return or self-assessment registration
Our other business bank account roundups
Sole trader bank account FAQs
You’re likely to be a sole trader if you’re self-employed and both run and own your business. This means you could also be a sole trader if you’re a freelancer or a contractor. Any profits from the business will usually be yours, though equally, you’re also responsible for any debts. You won’t be a sole trader if you’ve registered your business as a limited company, which creates a legal distinction between owners and their businesses.
You may be able to use your personal bank account for business purposes as a sole trader but you’d need to check with your account provider first. There’s no legal requirement to have a separate business account if you’re a sole trader, but it’s still worth considering as it will often make running a business easier.
Monzo business accounts can be a good option for sole traders, thanks to useful features such as free UK bank transfers and accounting software integration. However, it’s important to weigh up the various account options from other providers before deciding whether Monzo is best suited to you and your business.
Yes, you can get a sole trader account with no monthly fees from providers such as Monzo, Virgin Money, Tide and The Co-operative Bank. Our roundup of free business bank accounts explains more about accounts which have no regular charges.
Opening a sole trader bank account could take anywhere from a few minutes to several days or maybe even weeks. Online-only business accounts tend to be quicker to open than accounts from traditional high-street banks.
You can withdraw funds from your business account for personal use, because as a sole trader, your own finances aren’t legally distinct from those of your business. If you do draw money in this way, it’s best to keep detailed records so you know what to declare when filing tax returns.
Image source: Getty Images
About the Author
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