Top 10 Business Accounts for Sole Traders

Are you a sole trader running your business from a personal bank account? While it’s not illegal, mixing business and personal finances can create a major headache at tax time. A dedicated business account not only simplifies your bookkeeping but also makes you look more professional. Take a look if you need a business bank account as a sole trader here before you start!

So, which account is right for you? With so many options available, from high-street banks to digital challengers, making the right choice can be tricky. We’ve done the research and ranked the top 10 business accounts for UK sole traders to help you decide.

1. Starling Bank

Best for: The all-rounder (and fee-free banking)

Starling Bank has consistently topped customer service polls and is a favourite among the self-employed. Why? Because they offer a fully regulated UK bank account with no monthly fees and an app that is incredibly intuitive.

Key Sole Trader Features:

The Verdict: If you want a reliable, free, digital-first account that handles the basics perfectly, Starling is hard to beat.

Expert Opinion: As an accountant with years of experience, I can confidently say that Starling’s seamless integrations and fee-free model make it an excellent choice for self-employed professionals managing their finances efficiently.

2. Mettle (by NatWest)

Best for: Free accounting software

Mettle is a digital-only account backed by NatWest. Its biggest selling point is that it comes with a subscription to FreeAgent (accounting software) entirely for free—a saving that can be worth over £150 a year.

Key Sole Trader Features:

The Verdict: If you don't already have accounting software, Mettle is the best value option on the market purely for the included software.

Expert opinion: The integration of FreeAgent with Mettle offers an invaluable tool for sole traders, simplifying transaction tracking and ensuring effortless financial management.

However, one downside is that the FreeAgent integration is only free for limited companies and sole traders with an active Mettle business account, which might not suit those using multiple bank accounts or considering alternative banking options.

3. Monzo Business

Best for: Tax management and app features

Monzo offers two tiers: 'Lite' (Free) and 'Pro' (£5/month). For sole traders who struggle with saving for their self-assessment, the Pro account is often worth the monthly cost due to its 'Tax Pots' feature.

Key Sole Trader Features:

The Verdict: If you worry about your January tax bill, Monzo Pro’s automation is a game-changer. The Lite version is a solid free alternative if you just need the basics.

As much as I believe the automation features offered by Monzo Pro can significantly reduce human error and save valuable time during the self-assessment process, one drawback is that it may not be comprehensive enough for those with more complex financial situations, such as managing multiple income streams or dealing with intricate expense claims.

4. Tide

Best for: Admin efficiency and scaling

Tide is not a bank, but a business financial platform. It is incredibly fast to set up (often within minutes). They operate on a 'pay as you go' model for the free account, charging transaction fees rather than a monthly subscription.

Key Sole Trader Features:

The Verdict: Great for freelancers who don't have high transaction volumes or who want to get set up immediately.

I think Tide provides a straightforward and efficient solution for freelancers to manage their finances without overwhelming complexity.

While Tide offers many great features, it may not be suitable for freelancers or small businesses that require advanced accounting tools or detailed financial reports, as its functionality is more focused on basic financial management rather than comprehensive accounting.

5. Virgin Money M Account for Business

Best for: Perks and cashback

Virgin Money offers a compelling digital account that sits nicely between traditional banking and fintech innovation. It offers perks that are rare in the business banking world, specifically cashback.

Key Sole Trader Features:

The Verdict: If you spend a lot on your business debit card (e.g., buying stock or paying for travel), the cashback can add up.

6. Lloyds Bank Business Account

Best for: Traditional banking support

If you prefer the security of a high street name and the option to walk into a branch (though digital management is encouraged), Lloyds is a strong contender. They support sole traders well with introductory offers.

Key Sole Trader Features:

The Verdict: Ideal if you want a 'big bank' name on your invoice and 12 months to get your business off the ground before paying fees.

Lloyds Business Banking stands out as a reliable choice for sole traders and small businesses, providing essential services like dedicated support teams and flexible banking options. Their first-year free banking offer is particularly appealing for start-ups looking to manage costs effectively while establishing their operations.

7. Barclays Start-up Business Account

Best for: Start-up resources and support

Barclays has a long history of supporting small businesses. Their start-up account is designed to help you launch, often providing access to business managers and ecosystem support.

Key Sole Trader Features:

The Verdict: A great choice if you want more than just a bank account—access to their business network can be valuable for new entrepreneurs.

An expert view might highlight that while the bank offers excellent perks like access to Eagle Labs and free tools, some may find the eligibility requirements or limited physical branches a drawback.

"Barclays’ business banking solutions are ideal for entrepreneurs looking to expand their network and access helpful resources like Eagle Labs. These features set them apart from traditional banking services. However, prospective customers should carefully assess their specific needs, especially concerning eligibility criteria and the availability of in-person support,"

8. Revolut Business

Best for: International trade

If your work as a sole trader involves clients overseas, for example, a freelance developer with US clients, Revolut is built for you. It handles multi-currency transactions better than almost anyone else.

Key Sole Trader Features:

The Verdict: Essential for sole traders who get paid in Dollars, Euros, or Yen.

According to Senior Financial Consultants, "While the platform offers fantastic value with multi-currency support and low exchange rates, some users may find the free plan's limits restrictive as their business grows.

9. Metro Bank

Best for: In-branch service

Metro Bank prides itself on being open when others are not. If your business deals heavily in cash and you need to make deposits on a Sunday, this is your best option.

Key Sole Trader Features:

The Verdict: The winner for cash-heavy businesses or those who prefer face-to-face interaction outside of banking hours.

According to financial experts, Metro bank's 7-day branch accessibility and instant account setup make it a clear choice for sole traders who rely heavily on in-person banking. Its extended hours and convenience are unmatched, particularly for businesses operating outside of traditional office hours."

10. Zempler Bank (formerly CashPlus)

Best for: Credit building

If you have a thin credit file or a poor credit history, opening a high street account can be difficult. Zempler specialises in this area, offering a functional account with credit-building features.

Key Sole Trader Features:

The Verdict: A lifeline for sole traders who need to repair their credit rating while running their business.

Why Do You Need a Dedicated Account?

You might still be wondering if you really need to switch. As we discussed in our detailed guide, "Do I Need a Business Bank Account as a Sole Trader", keeping finances separate is crucial for three reasons:

• HMRC Compliance: If HMRC investigates you, they have the right to look at all. If that is your personal account, they will be looking through your personal spending, too.
• Professionalism: Clients feel more secure paying "John Smith Design" rather than just "John Smith".
• Software Integration: You cannot automate your tax return if your bank feed is clogged with Netflix subscriptions and coffee shop visits.

Key Takeaways

• Go Digital for Low Fees: Starling and Monzo offer the best fee-free experiences for most sole traders.
• Look for Added Value: Mettle includes free accounting software; Virgin offers cashback.
• Consider Cash: If you deal in cash, Metro Bank or Starling (via Post Office) are your best bets.
• Think Global: Use Revolut if you have international clients.
• Separate is Better: Always keep business money separate from personal money to make tax season painless.