Best business bank accounts for sole traders UK 2026

Most sole traders can bank for free: Mettle, Monzo Lite, Starling and Tide Lite charged no monthly fee when we checked on 6 November 2026. The differences are in cash deposit fees, transfer allowances and which accounting software connects. Every figure comes from the provider’s own website, and providers are listed alphabetically, not ranked.

Does a sole trader need a business bank account?

No. Business.gov.uk says sole traders and ordinary partnerships are not legally required to have one, while limited companies must. It still recommends keeping business and personal money apart to make bookkeeping simpler.

HMRC’s record-keeping guidance says you might be able to use a personal or business account, and tells you to check with your bank which type you can use for business transactions. Whichever you use, you must be able to identify your business income and expenses. A separate account also makes MTD for Income Tax quarterly updates easier, because a bank feed holds only business items.

Business accounts for sole traders compared

This table shows monthly and cash deposit fees from each provider’s own pages.

NatWest’s Standard Tariff charges per transaction, and we could not open its tariff. For a wider fee comparison, see business bank account fees compared.

What each account offers

Mettle. Mettle has no monthly fee. It charges £1 per card cash withdrawal and £5 to replace a lost or damaged card. FreeAgent is included if you make at least one transaction a month.

Monzo. Monzo’s fee information, version 1.16 dated 18 August 2026, lists Lite at £0, Pro at £9 a month and Team at £25 a month. UK transfers, Direct Debits and standing orders are free.

NatWest. NatWest’s business current account has no minimum monthly charge on its Standard Tariff and includes FreeAgent while you keep the account. Businesses with turnover up to £2 million that switch using the full Current Account Switch Service get two years of free everyday banking.

Santander. The Business Current Account Classic is free for 12 months for start-ups and switchers, then £9.99 a month. Santander says it is for UK businesses with up to two owners or partners; its page does not mention sole traders, so confirm before applying.

Starling. Starling’s sole trader account has no monthly fee. You must be 18 or over, UK resident, and not trading through a partnership, limited company or LLP. You can apply without a UTR. Cash deposits are capped at £5,000 a day and £20,000 a calendar year.

Tide. Tide Lite is free with 5 bank transfers a month. Smart (£12.49) gives 30, and Pro (£27.49) and Max (£69.99) are unlimited. The pricing page does not say what a transfer costs after the allowance.

Which accounts link to accounting software?

Bank feeds save you typing in transactions. Starling says Xero, QuickBooks and FreeAgent connect for free, and its Accounting Essentials tool, including MTD for Income Tax, is included. Mettle and NatWest include FreeAgent, which otherwise costs £19 a month for sole traders. Tide’s Xero Connector starts on Smart.

See business bank accounts that link to accounting software and accounting software for sole traders.

Is my money protected?

Eligible deposits at UK banks are covered by the FSCS up to £120,000 per eligible person per firm, the limit since 1 December 2025. Starling says eligible deposits are FSCS protected. Tide says deposits held with ClearBank are covered, while its e-money accounts (sort code 23-69-72) are safeguarded instead. Mettle’s e-money account is not FSCS protected.

Which applies to you?

• If you take mostly card or bank payments, a no-fee app account covers most needs.
• If you bank cash every week, compare Monzo’s £1 flat fee with Starling’s 0.7% on your typical deposit.
• If you make more than 5 payments a month, Tide Lite’s allowance may be too small.
• If you want free FreeAgent, look at Mettle or NatWest.
• If you want a branch, compare NatWest and Santander, and note when Santander’s free year ends.

How to open a sole trader account

1. Register as self-employed with HMRC, though Starling accepts applications without a UTR.
2. Have photo ID and proof of your home address ready.
3. Apply in the provider’s app or online, giving your trading name and what the business does.
4. Connect the account to your accounting software.
5. Move business income and costs to the new account from day one.

Frequently asked questions

Can a sole trader use a personal bank account?

Yes. Sole traders are not legally required to have a business account, but check your bank’s terms allow business transactions and keep business and personal items identifiable.

Which business bank accounts for sole traders have no monthly fee?

Mettle, Monzo Lite, Starling and Tide Lite charged no monthly fee when checked on 6 November 2026.

Do I need a UTR to open a sole trader account?

Not always. Starling says you can apply without a UTR; other providers set their own rules.

Which account is cheapest for cash deposits?

Of the fees we could confirm, Monzo charges £1 per deposit, Mettle £2.75 and Starling the higher of £3 or 0.7%. Tide lists cash deposits as included on its pricing page.

Are sole trader accounts FSCS protected?

Bank deposits are protected up to £120,000. E-money accounts, such as Mettle’s and some Tide accounts, are safeguarded instead.