Keep your business and personal money separate from day one. A business bank account makes tax filing easier, looks professional to customers, and helps you track business expenses accurately. Sole traders are not legally required to have one, but most personal account terms prohibit business use.
- Limited companies
- Separate account needed
- Sole traders
- Not legally required, but recommended
- Partnerships
- Separate partnership account recommended
- Typical features
- Debit card, online banking, accounting integration, invoicing tools
What you need to open an account
Banks need to verify your identity, address, and business details. Gather these documents before you apply:
- Personal ID
- Passport or UK driving licence for all directors/partners/owners
- Proof of address
- Utility bill, bank statement, or council tax bill dated within last 3 months
- Company details (limited companies)
- Company registration number, registered address, details of shareholders owning 25%+
- Business details (sole traders)
- Trading name (if different from your name), description of what you do, expected turnover
Choosing the right account
Compare accounts based on your business needs. Some accounts are free for the first year, or free permanently with limited transactions, so check that any transaction cap covers your expected activity. If you take card payments, check merchant services fees, and if you may need an overdraft, compare rates and arrangement fees.
- Monthly fees
- £0 to £30 a month
- Transaction limits
- Often capped on free accounts
- Accounting integration
- Direct feeds to Xero, QuickBooks, FreeAgent
- Card payments
- Merchant services fees vary
- Overdraft facility
- Rates and arrangement fees vary
The application process
Most banks let you apply online. An online application takes 10 to 30 minutes, with a decision within 1 to 5 working days. An in-branch appointment takes 30 to 60 minutes and often gets same-day approval. Complex businesses, such as those in high-risk sectors or with overseas connections, can wait 2 to 4 weeks while the bank makes extra checks.
As a sole trader you can often open an account within 24 hours, because there are no Companies House checks and the ownership is simpler to verify. Limited companies and LLPs need Companies House verification, which can add days.
Some banks offer instant account numbers for online applications, letting you start receiving payments immediately while full verification completes.
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Check what documents you need
Use the UK Finance checklist to see exactly what your chosen bank requires for your business type.
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Compare business accounts
Look at monthly fees, transaction limits, and whether the account integrates with accounting software you use.
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Gather your documents
Get your ID, proof of address, and business registration details ready before applying.
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Apply online or book an appointment
Most applications take 10-30 minutes online. Complex businesses may need an in-branch appointment.
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Set up online banking
Download the banking app, set up security features, and connect to your accounting software.
Legal basis
Primary legislation and key regulations
Browse UK legislation (opens in a new tab) legislation.gov.uk