Last reviewed: 09 Jun 2026 | Sources: CMA Open Data API, FCA Register, provider published rates
TL;DR: A business current account is the standard transaction account for UK businesses - providing a sort code, account number, Faster Payments, BACS, and direct debit capability. Starling Business and Nationwide FlexBusiness are permanently free with no monthly fee. NatWest and Santander offer 18-month free periods. CMA9 banks charge £7.00 to £8.50 per month after free periods end.Key facts: business current accounts
- A business current account provides a UK sort code, account number, Faster Payments, BACS, and direct debit capability
- Starling Business, Nationwide FlexBusiness, and Mettle are permanently free with no monthly fee and no electronic transaction charges
- NatWest and Santander offer 18-month free periods - the longest among CMA9 banks - before standard fees of £7.50/mo apply
- All CMA9 banks provide open banking access under the CMA Retail Banking Market Investigation Order 2017
- No UK provider requires a minimum trading period - accounts can be opened on the day of incorporation
What is a business current account
A business current account is a bank account held in the name of a business - a limited company, sole trader, partnership, or LLP - that provides the core transaction facilities required for business banking: a unique sort code and account number, the ability to receive and make Faster Payments and BACS transfers, set up direct debits and standing orders, and hold a business debit card for purchases and cash withdrawals.
A business current account is distinct from a personal current account in that it is held in the business name rather than the individual's name. Limited companies are legally required to have a business account separate from the directors' personal accounts. Sole traders are not legally required to have a dedicated business account but keeping business and personal finances separate is strongly advisable for Self Assessment record-keeping and Making Tax Digital compliance.
Business current account options UK
| Provider | Monthly fee | Free period | E-payment | FSCS | Key feature |
|---|---|---|---|---|---|
| Starling Business | Free | Permanent | Free | Yes | Permanently free. No transaction fees. App-first. |
| Nationwide FlexBusiness | Free | Permanent | Free | Yes | Only permanently free CMA9 bank. Branch access. |
| Mettle (NatWest) | Free | Permanent | Free | Yes | Free. FreeAgent included. NatWest licence. |
| Monzo Business | Free | Permanent | Free | Yes | Free plan. Pro at £9/mo. FSCS. |
| NatWest (CMA9) | £7.50/mo | 18 months | 35p | Yes | Longest CMA9 free period. FreeAgent. |
| Santander (CMA9) | £7.50/mo | 18 months | 30p | Yes | Cashback up to £300/yr on eligible spending. |
| Lloyds (CMA9) | £7.00/mo | 12 months | 27p | Yes | Lowest CMA9 ongoing fee. £200 switching offer (Jun 2026). |
| HSBC (CMA9) | Free* | Permanent* | 25p | Yes | International banking. 60+ currencies. |
| Barclays (CMA9) | £8.50/mo | 12 months | 35p | Yes | Business card. FX. Relationship manager. |
Source: CMA Open Data API, 09 Jun 2026. CMA Open Data API. Free periods apply to new account holders only.
Business current account fees: what you pay
Business current account fees fall into three categories. Monthly maintenance fees are charged by CMA9 banks after any free period ends - typically £7.00 to £8.50 per month. Digital-first banks including Starling, Nationwide, and Mettle have no monthly maintenance fee on a permanent basis.
Transaction fees are charged per electronic payment at CMA9 banks - typically 25p to 35p per Faster Payment or BACS credit. Starling Business and Nationwide FlexBusiness include unlimited free electronic transactions. Tide charges 20p per transaction on its free account.
Cash handling fees apply at all providers. Starling charges £3 per cash deposit at the Post Office up to £1,000, then 0.7% above that. CMA9 banks charge varying rates for branch cash deposits. Digital-only accounts (Monzo, Mettle) do not support cash deposits at all. Businesses with regular cash income should factor cash handling costs into their total account cost comparison.
Business current account versus savings account
A business current account is a transaction account designed for day-to-day payments in and out. A business savings account holds surplus funds to earn interest. Most businesses need both: a current account for operating cash flow and a savings account or notice account for reserves and tax provisions.
Several providers offer integrated savings alongside the current account. Starling Business offers savings spaces (sub-accounts) within the app. Monzo Business offers savings pots. Allica Bank pays up to 4.33% AER on its business current account balance, combining current and savings functionality. For businesses holding significant reserves, the interest income from a savings account or interest-bearing current account can meaningfully offset banking costs.
Opening a business current account: requirements
To open a business current account in the UK, the following are typically required: valid photo ID (passport or driving licence) for all directors; proof of address dated within 3 months for all directors; Companies House registration number for limited companies; HMRC UTR for sole traders; and a description of the business activity and estimated annual turnover.
Digital-first providers complete verification automatically using the Companies House API for limited companies and in-app biometric verification for identity. Accounts typically activate within minutes for sole traders and within hours for single-director limited companies. CMA9 banks require 3 to 7 business days for manual review.
Business current account and Making Tax Digital
HMRC's Making Tax Digital programme requires businesses to maintain digital transaction records. MTD for VAT has applied since April 2022. MTD for Income Tax Self Assessment applies to sole traders and landlords with qualifying income above £50,000 from April 2026. A business current account with open banking connectivity to MTD-compatible accounting software (Xero, QuickBooks, FreeAgent) provides the digital records HMRC requires.
All major business current account providers support open banking connections to accounting software. Mettle (NatWest) includes FreeAgent at no cost for qualifying customers, providing the most integrated free current account plus MTD-ready accounting solution in the UK market as at 09 Jun 2026.
Switching business current account: CASS
The Current Account Switch Service (CASS) enables businesses to switch current accounts within seven working days at no charge. All direct debits, standing orders, and incoming payments redirect automatically. A 36-month redirect covers payments arriving at the old sort code after the switch date. CASS is available to businesses with annual turnover up to £6.5 million.
The switch is initiated at the new bank. The old account closes automatically on the switch date. Accounting software bank feeds must be manually reconnected after the switch. CASS does not transfer lending arrangements - businesses with overdraft facilities should confirm the new bank will provide equivalent lending before initiating the switch.
Business current account for partnerships and LLPs
Partnerships and limited liability partnerships can open business current accounts in the partnership name. LLPs registered at Companies House apply using the LLP registration number. General partnerships without Companies House registration must provide a signed partnership agreement. For LLPs with multiple partners, most providers support multi-user access with individual payment permissions per partner. CMA9 banks offer dual-authorisation where high-value payments require approval from two partners - available at NatWest, Lloyds, and HSBC.
Business current account interest rates
Most business current accounts pay no interest on credit balances. The exceptions are Starling Business (3.25% AER on the current account balance) and Allica Bank (up to 4.33% AER with transaction fees). At 3.25% AER, a business maintaining an average balance of £20,000 in a Starling Business account earns approximately £650 per year in interest with no separate action required - interest accrues daily on the current account balance.
For businesses currently holding operating balances in a non-interest-bearing CMA9 current account, switching to Starling provides both zero fees and interest income on the same balance. The combined effect of eliminating monthly fees (£90 to £102 per year) and earning interest (£650 at £20,000 average balance) represents a total annual benefit of approximately £740 to £752 versus a standard paid CMA9 account with no interest.
Frequently asked questions
What is a business current account?
A business current account is a bank account in a business name providing a sort code, account number, Faster Payments, BACS, direct debits, and a business debit card. Limited companies are legally required to have a dedicated business account. Sole traders are not legally required but it is strongly advisable for clean record-keeping and Making Tax Digital compliance.
What is the best business current account in the UK?
Starling Business, Nationwide FlexBusiness, and Mettle (NatWest) are permanently free with no monthly fee and no electronic transaction charges - all are FSCS-protected FCA banks. NatWest offers the longest CMA9 free period at 18 months for businesses needing a high-street bank relationship. Fee data from CMA Open Data API as at 09 Jun 2026.
Do I need a business current account as a sole trader?
HMRC does not legally require sole traders to have a dedicated business current account. However, keeping business and personal finances separate is essential for accurate Self Assessment and Making Tax Digital compliance from April 2026. Several providers offer permanently free sole trader business accounts with no minimum balance or trading period.
How long does it take to open a business current account?
Digital-first banks (Starling, Monzo, Mettle) activate accounts within minutes to hours. CMA9 banks take 3 to 7 business days. The application takes 10 to 30 minutes to complete online. Limited companies must be registered at Companies House before applying.
Can I switch my business current account for free?
Yes. The Current Account Switch Service (CASS) is free and completes within 7 working days. All direct debits and standing orders transfer automatically. The service is available to businesses with annual turnover up to £6.5 million.
