Best business account for sole traders in the UK (2026)

Opening a dedicated business bank account is one of the most practical steps a sole trader can take. It separates your personal and business finances, makes bookkeeping faster, and removes the annual headache of sifting through personal transactions to calculate your tax liability.

In the UK, sole traders are not legally required to hold a business account, but most accountants and HMRC recommend it. More importantly, the best accounts today are free, open in minutes, and come with invoicing tools and accounting integrations baked in.

This guide covers seven accounts that are particularly well-suited to sole traders, ranked by overall score and with a clear recommendation for each use case.

What to look for as a sole trader

Sole traders have different priorities from limited companies. You rarely need multi-user access or complex approval workflows. What matters most is low cost, simple tax management, and a fast application that does not require Companies House registration.

Key things to check:

• Monthly fees and per-transaction charges
• Whether the account accepts sole traders (most do, but Allica Bank does not)
• FSCS deposit protection up to £85,000
• Accounting integrations (Xero, FreeAgent, QuickBooks)
• Tax pots or savings features for setting aside money for Self Assessment

Starling Bank Business Account

Starling is the top-rated business account for sole traders on BankingGeek with a 5-star rating. It is a fully FCA-licensed bank, which means your money is covered by FSCS protection up to £85,000. There is no monthly fee and no charge per UK Faster Payment, regardless of how many transfers you make.

The Spaces feature lets you ring-fence funds for VAT and Self Assessment inside the same account, removing the need to open a separate savings account for tax. Starling also integrates directly with Xero, QuickBooks, and FreeAgent at no extra cost.

What you get

• No monthly fee and no per-transfer charge on UK Faster Payments
• FSCS protection up to £85,000
• Spaces for tax and project ring-fencing
• Xero, QuickBooks, and FreeAgent integrations included
• Overdraft available on application
• Apple Pay, Google Pay, iOS and Android app

Best for: Sole traders making more than ten UK transfers per month who want a zero-cost account from a licensed bank with built-in tax management.

Watch out for: Cash deposits go via Post Office counters, which charge their own fees. No built-in invoicing on the core account.

Mettle Business Account

Mettle is NatWest's free business account built specifically for sole traders and freelancers. It is the only account on this list that bundles a free FreeAgent subscription worth up to £228 per year. If you already pay for FreeAgent separately, switching to Mettle immediately saves you money.

Mettle is an e-money account rather than a bank, so deposits are safeguarded under FCA e-money rules rather than FSCS-protected. The account is only available to sole traders and single-director limited companies, which makes it a natural fit if you are self-employed.

What you get

• No monthly fee
• FreeAgent accounting included at no cost
• Invoicing, receipt capture, and VAT tracking in the app
• Mettle+ add-on (£4 per month) for automated invoicing
• NatWest-group backing
• Apple Pay, Google Pay, iOS and Android app

Best for: Sole traders and freelancers who use or plan to use FreeAgent. The bundled software subscription more than covers the value of any alternative.

Watch out for: No FSCS protection. Limited to sole traders and single-director companies. App-only with no branches or phone support.

Monzo Business Account

Monzo is a fully licensed UK bank with FSCS protection to £85,000. Its free Lite plan covers the basics: unlimited UK transfers, a debit card, and Tax Pots for setting aside Self Assessment funds. There is no monthly fee on the Lite tier.

The catch for sole traders who want accounting integrations is that Xero, QuickBooks, and FreeAgent connections are locked behind the Pro plan at £9 per month. For a freelancer who needs those feeds, that is a cost to factor in.

What you get

• Lite plan: no monthly fee, unlimited free UK transfers
• FSCS protection up to £85,000
• Tax Pots for ring-fencing VAT and income tax
• Pro plan (£9 per month): Xero, QuickBooks, FreeAgent integration
• Apple Pay, Google Pay, iOS and Android app
• 24/7 in-app customer support

Best for: Sole traders who want a free account from a recognised licensed bank and are comfortable without accounting integrations on the free tier.

Watch out for: Accounting integrations require the paid Pro plan. No overdraft on Lite. International transfers carry a 1% FX fee.

Tide Business Account

Tide serves over 600,000 UK businesses and is one of the most popular accounts for sole traders starting out. The free plan comes with built-in invoicing, direct feeds to Xero, QuickBooks, FreeAgent, and Sage, and same-day account opening without a credit check.

The free plan includes five UK transfers per month, with each additional transfer costing 20p. That is manageable for sole traders with low transaction volumes but becomes noticeable for anyone making 50 or more payments a month. Customer funds are held by ClearBank under FCA e-money safeguarding rules.

What you get

• Free plan: five transfers per month (20p per transfer after)
• Plus: £9.99 per month; Pro: £27.49 per month
• Built-in invoicing and expense management
• Xero, QuickBooks, FreeAgent, and Sage integrations on the free tier
• Multiple expense cards
• Apple Pay, Google Pay

Best for: Sole traders in the very early stages of their business who want quick setup, built-in invoicing, and accounting feeds without an initial cost.

Watch out for: Per-transfer fees add up quickly. Deposits are safeguarded, not FSCS-protected. No overdraft on the free plan.

ANNA Money Business Account

ANNA stands out for its built-in tax tools. The Pay As You Go plan has no monthly fee but charges 0.95% on all incoming payments. For a sole trader receiving £3,000 a month, that is £28.50 in charges. For anyone receiving more than around £2,400 a month regularly, ANNA's Business plan at £22.90 plus VAT works out cheaper.

The admin features are genuinely useful for sole traders: automated tax estimates, VAT reminders, Making Tax Digital support, and receipt scanning are all available from the free tier. ANNA is an e-money account, not a bank.

What you get

• Pay As You Go: no monthly fee, 0.95% on incoming payments
• Automated Self Assessment and VAT tax estimates
• Making Tax Digital (MTD) support
• Receipt capture and expense categorisation
• Invoicing and bill payments
• Apple Pay, Google Pay

Best for: Sole traders who want hands-off tax management and do not mind paying a percentage of income rather than a fixed monthly fee.

Watch out for: No FSCS protection. Percentage charge on incoming payments makes it expensive for higher-revenue businesses. No overdraft.

Wise Business Account

Wise is the best option for sole traders who regularly receive payments from overseas or pay international suppliers. It holds balances in over 50 currencies, offers mid-market exchange rates on transfers, and provides local account details in GBP, EUR, USD, AUD, and more.

There is no monthly fee. An optional one-off £50 setup fee unlocks team access, batch payments, and advanced multi-currency features. Wise is an e-money institution authorised by the FCA, so funds are safeguarded rather than FSCS-protected.

What you get

• No monthly fee (£50 one-off for advanced features)
• Multi-currency balances in 50+ currencies
• Mid-market FX rates on international transfers
• Local account details in multiple currencies
• 0.5% cashback on eligible card spending
• Xero, QuickBooks, and FreeAgent integration

Best for: Sole traders who invoice overseas clients, receive payments in multiple currencies, or regularly pay international suppliers.

Watch out for: No FSCS protection. Not the right primary account for a GBP-only domestic business. No overdraft.

Revolut Business Account

Revolut became a fully licensed UK bank in March 2026, which means sole trader deposits are now covered by FSCS up to £85,000. Its strength lies in multi-currency banking and expense management, with real-time spending notifications, virtual cards, and integrations with Xero, QuickBooks, Sage, and FreeAgent.

Unlike the other accounts here, there is no permanently free plan for new business customers. The entry-level plan starts at £10 per month, which makes Revolut a harder sell for sole traders on tight margins.

What you get

• Plans from £10 per month (Grow: £30; Scale: £90)
• FSCS protection up to £85,000 (since March 2026)
• Multi-currency accounts and international payments
• Virtual cards and expense management
• Xero, QuickBooks, Sage, and FreeAgent integrations
• Apple Pay, Google Pay

Best for: Sole traders with regular international transactions who want a fully licensed bank with strong FX tools and accounting integrations.

Watch out for: No free plan for new customers. FX and transfer allowances are capped by plan tier. Monthly costs add up for low-revenue businesses.

Which account is best for a sole trader?

Starling is the best all-round business account for sole traders. It is the only account that combines no monthly fee, no per-transfer charges, FSCS protection, built-in tax pots, and free accounting integrations in a single package.

If you already use FreeAgent, Mettle is the most cost-effective choice because it bundles that software subscription for free.

For very new businesses with minimal transactions, Tide or ANNA offer quick setup with invoicing and tax tools built in from day one.

Wise and Revolut are specialist options suited to sole traders with international payments. Neither is the right primary account for a GBP-only domestic business.

Quick comparison

Account	Monthly fee	FSCS	Accounting	Best for
Starling	Free	Yes	Xero, QuickBooks, FreeAgent	Most sole traders
Mettle	Free	No	FreeAgent included	FreeAgent users
Monzo	Free (Lite)	Yes	Pro plan only	Simple banking
Tide	Free (5 tx)	No	Xero, QBO, FreeAgent	New businesses
ANNA	0.95% on income	No	Xero, QuickBooks	Tax-focused
Wise	Free	No	Xero, QuickBooks	International
Revolut	From £10	Yes	Xero, QBO, Sage	International + bank

How to open a sole trader business account

Most of these accounts open online or via app in under ten minutes. You typically need:

• Your name and home address
• A UK mobile number
• Proof of identity (passport or driving licence)
• Your National Insurance number
• Details of your business activity

Sole traders do not need a Companies House registration number. If you have a registered trading name, note that some accounts display the account holder as your personal name rather than your business name on bank statements.

Frequently asked questions

Do sole traders need a business bank account?

There is no legal requirement in the UK, but it is strongly recommended. A dedicated account makes it much easier to track income and expenses, complete your Self Assessment, and prove turnover if you ever apply for a mortgage or business loan.

Can I open a business account if I have bad credit?

Tide, ANNA, and Cashplus all advertise high acceptance rates and do not run hard credit checks on the standard account application. Starling, Monzo, and Mettle may check your credit history as part of their application process.

Is my money protected in a business account?

Accounts from Starling, Monzo, Revolut (since March 2026), NatWest/Mettle (via NatWest), Barclays, HSBC, Lloyds, NatWest, and Tide (via ClearBank) are covered by FSCS up to £85,000. Accounts from Wise, ANNA, and the original Tide e-money accounts safeguard funds under FCA e-money rules but are not FSCS-protected.

What is the best free business account for a sole trader?

Starling is the best free business account for most sole traders because it has no monthly fee, no per-transfer charges, FSCS protection, and free accounting integrations. Mettle is the best free option if you already pay for FreeAgent, as the bundled subscription offsets more value than any banking feature.