Which type of business account to choose in the UK

Choosing the right type of business bank account in the UK depends first on your business structure. The needs of a sole trader (self-employed individual) differ from those of a limited company (LTD), and “freelancer” can fall into either category depending on how you operate. In this guide, we’ll clarify the differences and help you decide which account to open. We’ll also cover what you need to open a business account online, common requirements and documents, and how services like Sends can help UK businesses manage their finances.

Quick answer: What should you choose?

In a nutshell, choose your business account type based on your business structure:

• Limited Company – If your business is an incorporated LTD, you should open a dedicated UK limited company business account online in the company’s name. A company is a separate legal entity, so its finances must be kept separate from your personal finances.
• Sole Trader – If you are self-employed and operate as a sole trader, it’s highly recommended to open a separate business account (even though it’s not a legal requirement). Using a personal account for business can get messy and may violate your bank’s terms. An open business account UK sole trader will help you keep business income/expenses separate from personal ones.
• Freelancer – “Freelancer” isn’t a formal legal status. Most UK freelancers are essentially sole traders (self-employed). If that’s you, treat your banking like a sole trader. Some freelancers, especially contractors, operate through their own limited companies – in which case, you’d need a limited company account. Ensure you know which category you fall into, then choose the appropriate account type accordingly.

Bottom line: Sole traders and freelancers (as sole traders) can use either a personal account or a business account, but a business account is best practice. Limited companies should always use a business bank account in the company’s name for all transactions. Now, let’s dive deeper into why these distinctions matter.

Sole trader vs LTD vs freelancer: What’s the real difference?

Before choosing a bank account, it’s important to understand how sole traders, limited companies, and freelancers differ in a business context, especially regarding legal status and banking needs.

Sole trader (Self-employed)

A sole trader is a self-employed person who is the business legally – there’s no separate legal entity. This simplicity has advantages in setup and tax filing, but it also means personal and business finances are technically one and the same. Key points about sole traders:

• Simple Setup & Control: Becoming a sole trader is straightforward – you just register with HMRC for self-assessment and start trading. You have full control over the business, and all profits after tax are yours. There’s less admin than running a company (no Companies House filings, etc.).
• Tax as an Individual: Sole traders pay income tax on business profits (through self-assessment) and Class 2/4 National Insurance, rather than corporation tax. There are fewer tax planning options compared to a company, but also fewer obligations (e.g. no need for formal annual accounts).
• Unlimited Liability: A major consideration is that a sole trader has unlimited liability. If the business incurs debts, you are personally liable – there’s no legal separation protecting your personal assets. This is one reason some people later switch to an LTD for liability protection.
• Bank Account Recommendations: By law, a sole trader is not required to have a separate business bank account – you can use your personal current account for business if you wish. However, it’s strongly recommended to keep a separate account for your business finances. Separating your money makes bookkeeping and tax filing much easier and helps avoid confusion. Moreover, many banks prohibit using personal accounts for business transactions in their terms. If you use your personal account for lots of business payments, the bank might warn you or even close the account for breach of terms. In short, while not legally mandated, a dedicated business account is best practice for sole traders to stay organized and professional.

Tip: If you’re a sole trader just starting out, you might open a second personal account solely for business income and expenses. This isn’t a “business account” per se, but it keeps things separate. Just be sure your bank allows business use on that account. As you grow, consider switching to a proper business banking service for additional features (like trading under a business name, payment integrations, etc.).

Limited company (LTD)

A limited company (LTD) is a business that is a separate legal entity from its owners (shareholders) and directors. This distinction carries important implications for banking:

• Separate Legal Entity: Because the company is its own legal person, its money belongs to the company, not to you. As a director, you have a legal duty to keep the company’s finances separate from your personal finances. In fact, official guidance from the UK government emphasizes that there must be a clear division between company finances and personal funds. Practically speaking, this means an LTD should have its own business bank account – you should not be paying company earnings into your personal account or vice versa.
• Legal Obligations: While there’s technically no specific law that says “you must open a bank account,” in fulfilling your duties to separate finances, opening a business account in the company’s name becomes essentially obligatory. Even HMRC has stated that you are required to have a business bank account to meet the legal duties of running a company. So, in practice, every limited company needs its own account. If you’re the only director/shareholder, this rule still applies – the company’s money is not your personal slush fund.
• Banking in Company Name: A business account for an LTD will be opened in the company’s name (e.g. Example Ltd) rather than your personal name, allowing you to transact as the company. It helps build credibility and a financial identity for the business. You’ll use it to receive customer payments made out to the company and to pay expenses, salaries, dividends, etc. Trying to run a company from a personal account is not only messy but may not even be possible (banks won’t let you open an account in a company’s name as a personal customer).
• Necessary Documentation: Opening a company bank account involves a bit more paperwork. Because an LTD has formal registration, the bank will usually require your Certificate of Incorporation or company registration number (they might verify details with Companies House). You’ll also need personal ID and proof of address for the directors, and possibly documents for significant shareholders and Persons of Significant Control (PSCs). We’ll cover specific document requirements later. Additionally, most banks insist that company banking is kept separate—some guides phrase it as “not strictly a law, but best practice”, yet virtually all accountants and advisors will tell you a dedicated business account is a must for an LTD.

“Freelancer” – not a legal status, but a way of working

The term freelancer is commonly used to describe someone who is self-employed and offering services to clients, often on a project or contract basis. However, “freelancer” itself is not a legal form in the UK – it’s more of a description of how you work, not under an employment contract. Legally, most freelancers fall into one of two categories:

• Sole Trader Freelancers: This is the most common. In fact, in the UK most freelancers operate as sole traders (self-employed). That means, from HMRC’s perspective, you are the business and you report your freelance income on your personal tax return. If you describe yourself as a freelancer to clients but haven’t set up a company, you are by default a sole trader. Your banking needs will be similar to any sole trader – you might even use your personal account initially, but it’s wise to have a separate business account for professionalism (e.g. to invoice under a business name) and easier bookkeeping.
• Freelancers through a Limited Company: Some freelancers (especially in IT contracting, engineering, or other fields) choose to set up their own limited company and operate as a contractor through that company. In essence, you become the director and employee of your own one-person company that provides services. In this case, even though day-to-day you call yourself a freelancer, legally you need to do everything a small company does – including opening a business bank account for the company. Many contractors go this route for potential tax benefits or limited liability protection, but it comes with more admin overhead.

Key takeaway: “Freelancer” isn’t a separate pathway for banking. Figure out whether you’re acting as a sole trader or an LTD. If sole trader, you have flexibility (but should lean toward a business account for the reasons mentioned). If operating via a limited company, you must get a business account for that company. In either case, when comparing business accounts for freelancers UK, you’ll want to consider things like ease of receiving client payments (potentially in different currencies), the ability to send out invoices or use payment links, and low fees since freelancers often have variable income.

Now that we’ve clarified the account types based on business structure, let’s discuss what features to look for when choosing a business bank account in the UK.

What to look for in a UK business account (so you don’t overpay)

Not all business bank accounts are created equal. Whether you’re a sole trader, freelancer, or running an LTD, you’ll want an account that fits your needs without burdening you with unnecessary costs. Here are key factors and features to consider when evaluating UK business accounts:

• Online Onboarding & Speed: How quickly can you open the account? Modern fintech providers often let you apply and get an account number within minutes or hours, all online. Traditional banks might take days or weeks (sometimes requiring in-person ID checks). If you value speed and convenience, look for accounts with quick online onboarding and a simple Know Your Customer (KYC) process. Many app-based business accounts (e.g. Tide, Starling, Monzo Business) advertise fast setup – in some cases, under 10 minutes for approval. Speedy onboarding is great, but ensure you have all the needed documents ready to avoid delays (more on that in the step-by-step section).

• UK Payments and International Transfers: Consider the account’s payment capabilities. At minimum, your business account should support standard UK payments: Faster Payments, BACS direct credits, and Direct Debits (useful if you pay bills or employees). If you have clients or suppliers abroad, check the international transfer options. Do they offer SEPA payments for Europe and SWIFT for worldwide? What are the fees for sending/receiving international wires? Some challenger banks and EMI (Electronic Money Institution) services like Wise or Revolut focus on cheap international transfers and may be better if you do a lot of cross-border business. If you rarely deal internationally, this might be less critical, but it’s good to have the option.

• Multi-Currency and IBAN functionality: Related to international needs is whether the account offers multi-currency support. For example, can you hold balances or open sub-accounts in EUR or USD? Can you easily get an IBAN to receive payments from EU clients? A multi-currency account can save you money on conversion fees and allow you to “invoice like a local” in other countries. Freelancers or businesses serving overseas customers might benefit greatly from this. Some fintech providers (including Sends) offer multi-currency business accounts with unique IBANs for different currencies, which can be a big plus if you get paid from abroad regularly.

• Fees – Monthly, Transaction, FX: Cost is a huge factor. Traditional banks often charge monthly maintenance fees for business accounts (e.g. £5-£10/month, sometimes waived for the first year or if balance criteria are met). Many newer providers have no monthly fees. However, they might charge for certain transactions or cash withdrawals. Make sure you understand:

  • Monthly account fee: Is there a monthly charge? Some banks waive fees for startups or offer a free period. Others (like some digital banks) have free tiers and paid tiers with extra features.

  • Transaction fees: Check fees for things like outbound Faster Payments, incoming payments, Direct Debits, ATM withdrawals, etc. Many accounts offer unlimited electronic UK transactions for free, but some might limit cash deposits or charge for certain actions.

  • Foreign transaction/FX fees: If you will send or receive in other currencies, compare the currency conversion fees or international transfer fees. Some accounts add a percentage markup on FX or a flat fee on international payments. Services targeting global business (e.g. Wise Business) usually have lower FX fees (often mid-market rate + small percentage).

  • One-time fees: Are there setup fees or card issuance fees? For example, Sends has a one-time account opening fee (currently around £19.99 for a base GBP account) and a fee for adding additional currency wallets. Be aware of any upfront costs to open the account.

• Integrations and Tools: Beyond costs, look at features that can make your life easier. Does the account have a good mobile app and online banking interface? Can it integrate with accounting software (like QuickBooks, Xero) to streamline bookkeeping? Some accounts offer handy tools like invoicing, expense categorization, or receipt scanning. If you’re a freelancer or small business doing your own accounts, these features can save time.

• Limits and Scalability: Ensure the account can handle your transaction volume. Some entry-level business accounts might have limits on the number of transfers per month or a cap on deposit amounts (especially some free tiers). If your business grows, will the account still accommodate you without hefty fees? Also, check if there’s a cap on cash transactions if you deal in cash, or any limits on the number of users (for companies with multiple directors).

• Customer Support and Reliability: Don’t overlook service. Is there 24/7 support or at least prompt help when you need it? Online-only banks often have in-app chat support. Read reviews about uptime and any hiccups – you need access to your money reliably. Established banks have a long track record, while newer fintechs might have occasional downtime, but they often compensate with better tech and support responsiveness.

• Eligibility and Restrictions: A common mistake when choosing an account is not checking the eligibility criteria. Some UK business accounts have restrictions based on:

  • Business age or type: A few banks require that your business has been trading for a certain time (e.g. 1 year), though many do accept startups. Certain industries (like gambling, adult, crypto businesses) might be excluded by some providers due to risk policies.

  • Residency and registration: Many providers require the business owner (or company directors) to be UK residents and the business to be UK-registered. If you or other directors/shareholders are non-UK residents, not all banks will accept you – you’d need to find specialized providers that allow international owners. Always check if “UK only” is a rule. (For example, Sends’ services are available to UK-based businesses and recently expanded to some other countries, but their acquiring (card processing) is explicitly “available for UK companies only”.)

  • Personal credit history: Some banks do a personal credit check on owners/directors when opening a business account (especially high-street banks). Others (like certain e-money institutions) might not. If you’ve had credit issues, you might favor providers that don’t require a strong personal credit score or offer no-credit-check accounts.

By considering these factors, you can shortlist the accounts that fit your operational needs and avoid nasty surprises in fees or restrictions. The goal is to find a cost-effective account that offers the functionality you need for day-to-day business banking without paying for extras you don’t use.

Now, let’s address specific scenarios and questions: when a sole trader should open a business account, why an LTD must have one, and what matters for freelancers.

If you are a sole trader: when it makes sense to open a business account

If you’re a sole trader, you technically don’t have to open a business bank account by law. However, there are several scenarios where opening one is very sensible and will save you headaches:

• High Volume of Transactions: If your business involves many transactions (lots of client payments, expenses, etc.), keeping them separate from your personal transactions is crucial for proper record-keeping. For example, if you have dozens of income and expense entries each month, running that through your personal account can turn your bank statement into a jumbled mix. Separating them into a business account makes bookkeeping and tax time far easier – you can clearly see what was business-related. It will also simplify things if HMRC ever asks for records.

• Professional Image: Having a dedicated business account can make you look more professional. You can often have your trading name on the account. This means when clients pay you, they can pay your business name rather than your personal name (many banks allow a “business name” for sole trader accounts). And when you issue invoices, putting dedicated business banking details (with possibly a business account name, sort code, account number) signals that you take your business seriously. It also helps build credibility if you’re dealing with larger clients who expect to see payments going to a business account.

• Bank Rules on Personal Accounts: As mentioned, a lot of personal bank account terms forbid using them for business. When you were just starting out with a side gig, you might have gotten away with using a personal account. But as you grow, the risk of the bank noticing increases. If they flag business activity on your personal account, they might freeze or shut it down, which could be disastrous (you could suddenly lose access to funds). To avoid this, it makes sense to open a business account once you’re earning regular income from your sole trader activities. It’s better to be proactive than forced by your bank later.

• Clarity for Budgeting and Tax: Keeping separate accounts also helps you know your numbers. You can easily see business cash flow in one place. Come self-assessment time, you might even give your accountant access to your business account statements without revealing personal spending. It’s just cleaner. Many sole traders say the moment they opened a business account, it became easier to manage budgets for taxes, expenses, and savings for the business separately from personal bills.

In short, open a business account UK sole trader once your business is more than a very occasional hobby – ideally as soon as you start taking in money for your services or goods regularly. It’s an investment in good financial hygiene.

What You’ll Need (Documents & Prep): Opening a sole trader business account is usually straightforward. Generally, you should prepare the following:

• Proof of Identity: A valid photo ID like a passport or UK driving licence. If you apply online, you’ll scan or photograph it. The bank may also do a biometric check (like asking for a selfie or a short video) to verify it’s you.

• Proof of Address: A recent utility bill, bank statement, or council tax bill (usually dated within the last 3 months) with your name and address. Digital banks might verify your address electronically, but have a PDF or scan of a bill ready just in case.

• Evidence of Sole Trader Status or Business Activity: Since you don’t have a company registration, banks sometimes ask for proof that you’re actually trading. This could be your Unique Taxpayer Reference (UTR) from HMRC (if you’ve registered as self-employed), or even a copy of a recent tax return if you have one. Some banks accept alternative proofs, like an invoice from a client, a website or marketing materials, or a letter from an accountant. For example, Metro Bank lists documents like a recent invoice or HMRC correspondence as possible proofs of business for sole traders. Not all will ask for this at onboarding, but be prepared to demonstrate the nature of your business (even a simple letter describing what you do might help if asked).

• Initial Deposit: A few banks might require a small opening deposit (e.g. £50) when opening the account. Many modern accounts don’t have a minimum deposit, but it’s good to have some money ready to transfer in to activate the account.

Tip: Make sure you meet any eligibility criteria (age, residency, etc.) for the account before applying. Most UK banks require sole traders to be UK residents. If you’re not a UK resident but need a UK account for your self-employed business, you’ll have to look at specialist providers or fintech options.

If you run an LTD: why a dedicated business account is the default

For a limited company owner, having a separate business bank account isn’t just an option – it’s the default norm. Here’s why you should always use a dedicated account for your LTD:

• Separate Entity = Separate Banking: A limited company’s finances must be segregated from personal ones by the very definition of an LTD. All income the company earns should go into an account in the company’s name, and any expenses or withdrawals (like paying yourself a salary or dividends) come out of that account. If you intermingle funds by using a personal account, you’re blurring legal lines and potentially breaching your director duties. It could also cause accounting nightmares and even legal trouble in case of an audit or if the company faces financial difficulties (creditors will want to see a clear trail of company money).

• “Practically Mandatory”: While, as noted earlier, there isn’t a statute that says “Article 55: All limited companies must have a bank account,” in practice you cannot run a company properly without one. Companies House or HMRC might not ask for your bank account details, but HMRC explicitly expects separation. In fact, HMRC’s own guidance has stated that opening a business bank account is required to comply with a director’s legal obligations. Also, consider that if you try to do anything finance-related (like taking card payments, using accounting software, etc.), they will expect business bank details. Not having a business account would raise red flags.

• Multi-Director and Stakeholder Requirements: If your company has more than one director or has investors/shareholders, a dedicated business account is even more important. You’ll likely need multiple signatories or at least access for co-directors. A personal account in one person’s name isn’t acceptable when company funds actually belong to the company as a whole. A business account allows proper controls, like requiring dual authorizations for payments (if you set that up), and provides transparency to all owners. It also simplifies things when preparing annual accounts, as the accountant can tie the figures directly to the bank statements of the company.

• Documents You’ll Need for an LTD Account: Opening a UK limited company business account online will require a few extra steps compared to a sole trader:

  • Company Details: You will need to provide the company’s registered name, address, and registration number. Many online banks will automatically fetch details from Companies House (when you provide the company number) as part of the application. Having your Certificate of Incorporation or a Companies House printout can be useful just in case.

  • Director/Owner ID and Address: All directors will need to provide proof of ID and address (same as for personal accounts). If you have multiple directors, the bank may require all of them (or at least a majority) to complete ID verification. Similarly, significant shareholders (usually anyone with 25% or more shares/ownership) may need to provide their details, because banks must perform KYC on “beneficial owners” of the company to prevent fraud and money laundering. Be prepared to gather IDs from your co-directors or owners.

  • Business Proofs: Some banks might ask for proof of business activity for new companies (for example, a copy of a client contract, a simple business plan, or proof of initial funding). This isn’t always asked for upfront, but don’t be surprised if the bank wants to understand what your company does (especially if the company name isn’t descriptive). If your company is brand new (no trading yet), sometimes a brief explanation in the application suffices.

  • Additional Checks for Non-UK or Complex Structures: If your company owners include other companies (parent companies) or many foreign owners, the bank may require more documents (like group structure charts, ID for ultimate beneficial owners abroad, etc.). Also, if not all directors/shareholders are UK residents, be sure to check the bank’s policy – some high-street banks might reject the application, whereas some online providers will accept it with additional checks.

Business account for freelancers UK: what matters most

If you’re a freelancer in the UK, you might be wondering what kind of banking setup will serve you best. Since freelancers often have unique needs – like receiving payments from multiple clients, possibly in different countries, and handling everything solo – here are the things that matter most for a freelancer’s business account:

• Ability to Handle Regular Client Payments: Freelancers typically get paid per project or on a recurring basis by clients. Ensure your account makes it easy to receive payments. For UK clients, having a standard sort code & account number for bank transfers is fine. But also consider if you need to accept card payments or online payments from clients – some business accounts (or linked services) let you generate payment links or even integrate with PayPal/Stripe. If you invoice clients overseas, having features like SWIFT/IBAN receiving is important (so they can wire you money from abroad). A good freelancer account should accommodate various payment methods that your clients use.

• Multi-Currency for International Work: Many UK freelancers work with clients in the EU, US, or globally. If you fall into this category, a multi-currency account is extremely useful. Being able to receive USD or EUR without high fees means you won’t lose money on conversion on each payment. For example, Wise Business or Revolut Business provide multi-currency IBANs and local bank details in various countries, which can be great for freelancers. Sends also supports multi-currency accounts, meaning you could invoice a client in euros to your EUR IBAN and hold that balance or convert it when rates are favorable. This flexibility can save you from exchange rate surprises and make you more appealing to international clients (because you can accept payment in their currency).

• Fast Access to Funds & Payouts: Freelancers are often mindful of cash flow – you want to get paid quickly and be able to use that money. Accounts that clear payments faster (most UK Faster Payments are instant anyway) or offer things like instant notifications are helpful. Additionally, if you collaborate with subcontractors or outsource work, you’ll want to pay others quickly too. An account with a good mobile app allows you to send payments on the move, and perhaps integrate with services to pay people abroad (again, thinking of FX fees if you hire a contractor overseas). For instance, Sends highlights use-cases like making payouts to freelancers or contractors directly to their card or bank via IBAN, which is a scenario where a flexible account is valuable.

• Low Fees and Easy Admin: Freelancers usually operate on tight margins. An ideal business account for freelancers UK should have low or no monthly fees, and low transaction fees – especially since your transaction volume might be moderate. Look out for accounts that charge per transfer; those costs can add up if you issue many invoices. Many freelancers also appreciate integrated tools: does the account provide invoice templates or at least smooth integration to accounting apps? If you can generate an invoice and have a “Pay now” button that goes straight into your account, that’s a bonus. Also, consider if the account provides a debit card with low foreign transaction fees – useful if you travel for work or pay for online services in other currencies.

(Example: A UK freelance graphic designer with clients in Germany and the US might use an account like Sends or Wise to receive EUR and USD payments, hold them, and convert at good rates, instead of forcing clients to convert to GBP. Meanwhile, a domestic-only freelancer might prioritize an account with no fees and maybe tools for tax savings or budgeting.)

Now that we’ve covered choosing the account type and features, let’s outline how to actually open a business account online, step by step.

How to open a business account online (step-by-step)

Opening a business bank account online is generally a straightforward process if you prepare in advance. While each bank or provider will have its own specific flow, most follow these steps:

1. Gather the Required Documents: Before you start the application, collect the documents you’ll need. These typically include:

   • ID for all relevant persons: your passport or driving licence (and for LTDs, IDs for all directors/partners involved).

   • Proof of address: recent utility bill, bank statement, etc., as discussed earlier.

   • Business documents: If sole trader, maybe your UTR or proof of trading (invoice, etc.). If a company, your company number or incorporation certificate, and possibly company tax registration info if available. Having digital copies (scans or clear photos) of these ready will speed up the process.

   • Additional info: Prepare basic details like your business address, contact info, estimated turnover, nature of business (many applications ask for a short description or an industry category), and in some cases, the source of initial funds.

2. Apply Online (Fill in the Application Form): Go to the provider’s website or app and begin the application. You’ll typically create a login or provide an email to start. Then fill in personal details (name, DOB, etc.), business details (structure, company number if LTD, business name for sole trader, etc.), and answer some compliance questions. Be honest and thorough – inconsistencies can slow the process. Many fintech banks make this a smooth, guided process often in-app. Traditional banks might have an online form that later leads to an appointment, but many have improved to let you do it fully online.

3. Upload Documents & Verify Identity: When prompted, upload the scans or photos of your ID and proof of address. Many providers use automated systems to verify these. You may also be asked to do a quick identity verification step – commonly a selfie video or photo through the app or a third-party verification link. This is to match your face to your ID for KYC. For companies, if multiple people need to provide ID (co-directors, etc.), the bank will send emails to each person to upload their documents, or have you forward a link to them. Make sure everyone does their part promptly. If any document is unclear, the bank might ask for a rescan, so take high-quality images.

4. KYC/AML Checks and Review: After you’ve submitted everything, the bank’s compliance team will review your application. They will perform KYC (Know Your Customer) and AML (Anti-Money Laundering) checks in the background. This can involve electronic credit checks, sanction list checks, verifying your company at Companies House, etc. Usually, you don’t need to do anything during this stage but wait. It can be very quick (minutes or hours) if all is straightforward, or it might take a couple of days if something needs a manual review. For example, if your company has foreign shareholders or you mentioned a high-risk industry, they might scrutinize a bit more or ask a follow-up question. Just keep an eye on your email or app notifications in case the bank requests additional info (such as “please explain what services your business provides” or “who are your main customers?” – sometimes asked for compliance).

5. Account Approval and Activation: Once you pass the checks, you’ll be notified that your account is approved. You’ll receive your account details (account number, sort code, IBAN if applicable) usually via email or within the app/online banking. The account might be ready to use immediately for incoming payments. You might need to activate certain features: for instance, setting up your online banking password, ordering a debit card (some fintechs let you create a virtual card instantly and mail a physical card later). At this stage, you can typically start using the account – send your new banking details to clients for payments, switch your direct debits for bills to the new account, etc. If there was an opening deposit requirement, you’ll fund the account now to get going.

That’s it! In many cases, the entire process can be done without visiting a branch and completed within a day or two. Some digital banks boast even faster timelines (a majority of Tide’s customers, for example, get their account opened in under 48 hours, often under 10 minutes for simple cases). High-street banks might take a bit longer on average (one bank cites about 9 days on average for account opening), but even they are streamlining with online applications.

Tips for a Smooth Process: Double-check all the info you input to avoid common snags (typos in your name or address, mismatch with your ID, etc.). If you have any past issues like being on a fraud prevention list (CIFAS) or having been bankrupt, be aware this could cause rejection – in such cases consider specialist providers. But for most new businesses or sole traders, opening an account online is hassle-free if you follow the steps.

Sends as an option: where it fits

Let’s talk about Sends and how it can serve as an option for your business account needs. Sends is a UK-based financial services provider (headquartered in London, operating since 2017) that offers multi-currency business accounts and payment solutions. It’s not a traditional bank, but an electronic money institution that focuses on online services for businesses. Here’s where Sends can fit for you:

• UK Entities with International Reach: Sends is ideal if your UK-registered business deals with international clients or vendors. With a Sends account, you can have multi-currency IBAN accounts (e.g., GBP, EUR, USD) under one roof. This is great for receiving payments from abroad or holding balances in different currencies without converting every time. Companies or freelancers who get paid from the EU, US, etc. will find this useful.

• Fully Online, Fast Onboarding: The account opening with Sends is done online, targeting a quick and user-friendly process. If you prefer a modern fintech experience over visiting bank branches, Sends delivers that. You can manage everything through their platform once set up. (Do note, as a UK-focused service, Sends currently onboards UK businesses and certain other jurisdictions – always check the latest list of supported countries, but UK companies are supported by default.)

• Integrated Payment Solutions (Acquiring): For businesses that want to accept card payments online, Sends offers an internet acquiring service. Essentially, they can set you up to receive customer payments via Visa, Mastercard, and even Apple Pay/Google Pay, directly settling into your Sends account. This is a big plus if you run an e-commerce site or collect payments on your website. Note: This acquiring service is available to UK-registered companies only (so sole traders might not use this part, but an LTD can). It’s a convenient way to have banking and payment processing in one service.

• Transparent Pricing: Sends is upfront about fees. Importantly, there’s no monthly subscription fee for the standard account. They do charge a one-time account opening fee (£19.99 for the base GBP account as of this writing). If you want to enable additional currencies like EUR/USD, there’s an added setup fee (around £200 for extra currency wallets). Transaction fees, FX fees, and any other charges are clearly detailed on their pricing page. This transparency means you can calculate costs easily. For many small businesses, avoiding a monthly fee is a big advantage, especially if you won’t be making tons of transactions.

• Who It’s Best For: A Sends business account could be a great fit for small-to-medium UK businesses and active freelancers who need multi-currency banking, plan to operate entirely online, and possibly want to integrate global payment collection. If you’re a UK startup working with international contractors or subscriptions in different currencies, Sends allows you to pay out via SEPA/SWIFT and even directly to cards (helpful for quick payouts to partners or freelancers). It’s also useful for those who value having a modern platform — for example, you get features akin to those offered by services like Wise or Revolut, but with a focus on business use cases and the added benefit of optional acquiring services.

FAQ

Finally, let’s address some frequently asked questions about choosing and opening a business bank account in the UK:

Q: Do sole traders need a business bank account in the UK?
A: Legally, no – a sole trader is not required by law to have a separate business account. You can use a personal account, since there’s no legal distinction between you and your business. However, it’s highly recommended to use a business bank account or a separate account solely for business funds. Many banks’ terms and conditions forbid using personal accounts for business transactions, and keeping finances separate makes your life much easier come tax time. So while you can operate without one, in practice most serious sole traders do open a business account (or at least a dedicated account) to stay organized and compliant with bank rules.

Q: What documents do I need to open a UK business account online?
A: The exact documents can vary by bank, but generally you will need: (1) Proof of identity (passport or driving licence) for yourself (and any other account parties, like company directors); (2) Proof of address (recent utility bill, bank statement, etc.); and (3) Business-related documents. For a limited company, that means your company details (registration number, maybe a Certificate of Incorporation) and information on directors/shareholders. For a sole trader, you might be asked for proof of self-employment, such as a UTR number or a tax return, or some evidence of trading (like an invoice or HMRC letter). If applying online, you’ll be uploading digital copies of these. Also be prepared to provide some basic financial info (estimated turnover, nature of business) during the application.

Q: Can I use a personal account for freelancing in the UK?
A: If you’re freelancing as a sole trader, you can use your personal bank account in the sense that there’s no separate legal entity. But you should check your bank’s terms – many banks do not allow business use of personal accounts. If your freelance activity is just occasional, it might fly under the radar. But if you’re getting paid frequently by clients, it’s wiser to open a business account or a second account designated for your freelance income. This keeps you in good standing with your bank and will simplify tracking your freelance earnings and expenses. If you’ve set up a limited company for your freelancing (some do this for contracting), then no – you must use a business account in the company’s name, not a personal account.

Q: How long does an online business account application take?
A: It depends on the provider and your circumstances. With many fintech banks, the application can be done in minutes and approval can be very fast – often same day, sometimes within hours. For example, some providers say you can get an account number within 10 minutes if everything is straightforward. That said, the verification process can sometimes take a day or two if additional checks are needed. Traditional high-street banks might take several days to a couple of weeks to fully open an account, especially if they schedule calls or branch visits. In general, for a simple case (UK resident owner, standard industry, all documents in order), an online application is often completed within 1-3 days. Always apply well before you actually need to use the account, in case of any delays.

Q: What’s the difference between sole trader and LTD banking?
A: The core difference lies in ownership and requirements. A sole trader account is essentially your account (even if it’s a business-branded one, it’s still under your personal identity) and isn’t legally mandated. An LTD account is opened in the company’s name and is necessary to keep the company’s funds separate from personal money. With an LTD, the money in the account belongs to the company, and you as a director have to act in the company’s interest. This means more formalities: e.g., you might need multiple signatories, and the bank will require company documents to open it. Also, some banks offer products tailored for each – e.g. different fee structures or perks. Sole trader accounts might be easier to open (fewer checks) because they only assess you, whereas LTD accounts involve checking the company and all directors. In summary: sole trader banking is simpler and under your name, LTD banking is more regulated and under the company’s identity.

Q: Can I open a business account before my company/trade starts operating?
A: Yes, and it’s often a good idea to set up the account as soon as possible. If you’ve formed a new limited company, you can open a business account for it even if it hasn’t started trading yet – you’ll just indicate it’s a new company with no trading history in the application. Banks are used to this (startups open accounts to raise or spend initial capital). For sole traders, you can also open a business account around the time you register as self-employed. Some banks might ask if you have any initial invoice or proof of trade – you can explain it’s a new venture. Opening early ensures when you do get that first payment, it can go straight into the right account.

Q: Are there online business accounts with no fees?
A: Yes, many online-only accounts have no monthly fees. For example, Tide’s basic account, Starling Bank’s business account, Monzo Lite, and others charge £0 per month. They make money on optional services or certain transaction fees. Sends, as mentioned, has no monthly fee but does have a small setup fee. Always read the fee schedule – sometimes “no monthly fee” accounts still charge for cash deposits or foreign transfers, etc. If free monthly banking is a priority, look at the challengers, but also weigh the overall cost based on the transactions you’ll actually do.

Hopefully, these FAQs clear up some of your lingering questions. If you have a specific query not covered here, feel free to reach out or consult official resources (for instance, GOV.UK and bank websites have helpful guides on business banking rules and best practices).