What small business owners in the UK keep running into
The branch appointment is largely gone. Anyone searching for an online business bank account in the UK now compares sort codes inside an app: Starling, Monzo, Tide, Mettle, Revolut, ANNA, plus the high street names that finally caught up. Starling alone reports more than 500,000 business customers. That volume sounds like good news, and mostly it is, but it also means verification queues. A limited company needs its Companies House registration to hand, a sole trader needs proof of trading, and an application that looks thin will sit in review while your first invoice goes unpaid.
Cash is the second snag, and it catches out market traders, cafés, barbers, mobile mechanics. Starling takes 0.7% at the Post Office with a £3 minimum, though cheques go in through the app at no cost. Tide accepts deposits at Post Office and PayPoint counters with a charge per deposit. Mettle does not accept cash at all, at a counter or anywhere else. If your week ends with notes in a tin, that detail decides your account before anything else does.
Then there is the client who pays in euros and the supplier who invoices in dollars. Revolut Business and Wise both handle multi-currency properly, with monthly allowances at the interbank rate and a fee once you exceed them. High street banks can do it, but usually on a separate international tariff that is hard to read.
The quieter pressure is bookkeeping. Making Tax Digital pushed most sole traders and limited companies into digital records, so an account that feeds Xero, QuickBooks or FreeAgent directly saves a monthly subscription elsewhere. Mettle bundles a full accounting licence through its NatWest parent at no extra cost, which for a freelancer is a genuine reason to pick it over a prettier app.
The providers worth putting side by side
| Provider | Monthly cost | Suits | Cash handling | International | Main drawback |
|---|
| Starling | £0, no UK payment charges | Most sole traders and small limited companies | Post Office deposits at 0.7%, £3 minimum; cheques in-app | Standard payments, limited currency work | Cash deposits never feel cheap |
| Monzo Business | Lite £0, Pro £5 | Directors wanting invoicing and tax pots | Cash and cheques accepted | Outbound and inbound payments available | Best features sit behind the paid tier |
| Tide | Entry tier £0, then paid plans | Heavier transaction volumes | Post Office and PayPoint, charged per deposit | Available on paid tiers | 20p per outgoing transfer on the entry tier |
| Mettle | £0 | Micro-businesses that invoice and rarely touch cash | None | Not offered | No overdraft, no cash, no CHAPS |
| Revolut Business | Basic £10, Grow from £30, Scale from £90 | Firms with overseas customers | Card-led, limited cash | 25+ currencies, strong FX allowances | Monthly cost from day one |
| ANNA | Pay-as-you-go £0, Business £14.90 + VAT, Big Business £49.90 + VAT | Sole traders who want invoicing and tax reminders built in | Charged by percentage | SWIFT payments, £5 each | E-money account, so deposits fall outside the compensation scheme |
| Barclays, HSBC, Lloyds | Roughly £102–£120 a year on standard tariffs | Businesses needing lending, branches, cash | Branch and counter deposit | Full service | Paper-heavy onboarding, per-item charges |
Read that table as a starting point, not a verdict. Starling's comparison page puts NatWest at £0 effective annual cost and Barclays at £102, and the gap is not really about £100. It is about whether you need a relationship manager for a mortgage application or a credit facility next spring.
The charges that never make the headline
Monthly pricing is the least interesting number on the tariff sheet. Faster Payments matter more. Tide's entry tier includes a small monthly allowance of no-charge transfers and then charges 20p each; Monzo and Starling send them without a fee. For a business taking forty supplier payments a month, that is a real line item rather than a rounding error.
ATM access is the same story. Tide charges around £1 per £100 withdrawn, Revolut's Basic plan charges £2 per UK withdrawal, while Starling and Monzo do not charge for UK withdrawals. If you pay casual staff or buy stock in cash, this adds up quietly over a year.
Protection is worth understanding before you sign anything. Banks authorised by the PRA and FCA cover eligible deposits under the Financial Services Compensation Scheme. ANNA is an e-money institution regulated by the FCA, so your balance is safeguarded but not covered by that scheme. Revolut now operates as a fully authorised UK bank, which changed its position materially. For a business holding a large VAT reserve, this distinction matters more than any monthly fee.
A small illustration. A Leeds design studio with two directors and one US client compared three accounts on a single spreadsheet. On the surface the £0 options won. Once they costed out international receipts, an accounting subscription and a £5 monthly tier that included invoicing, the cheapest headline became the third cheapest option. They moved anyway, because the app exported straight into their accountant's software and saved an hour a month.
Paperwork, timelines and switching
Applications are usually decided within a working day, though complex ownership structures take longer. Have these ready: certificate of incorporation or partnership details, photo ID for every director, proof of business address, and something showing what you actually do, such as a website, a contract or an invoice.
- Register with Companies House first if you are incorporating; the bank checks the record.
- Download the provider's app and complete identity verification before you start the form, not after.
- Upload proof of trading that matches the name on your application exactly.
- Request the switch through the Current Account Switch Service once you are approved, so direct debits, standing orders and incoming payments are redirected automatically.
- Keep the old account open for a month and run both in parallel until payroll and VAT payments have cleared.
Direct debits and payroll are where switches go wrong. Confirm each supplier mandate has moved, and tell HMRC and your accountant the new details rather than assuming the redirect covers everything.
Start with one account that fits your cash profile, run a full quarter of transactions through it, then read the statement line by line. The tariff sheet, not the marketing page, tells you what banking your business actually costs. Request a copy of the full fee schedule before you apply, and check cash, international and transfer charges against your own last three months of activity.
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