9 Best Online Bank Accounts for Sole Traders in the UK: Fees, Usability, and Features for Self-Employed Businesses in 2023

Tide in Short

Tide’s free business bank account comes with a full UK sort code and account number, but its real value comes from its smart time-savings tools, which let you focus more time on your business in less time on administration. Perhaps the most useful feature for sole traders is that Tide generates an unlimited number of invoices for free.

As a sole trader, you get access to a business MasterCard. Tide will automatically categorize your transactions, make accounting easier, and track your invoices and payments. The free account allows you to hold up to five different business accounts, and integration with accounting software like QuickBooks or Xero means that more banking does not have to equal more headaches.

Unlike some of the other online business accounts on this list, Tide does not allow clients to hold foreign currency. While you may be able to receive transfers from a few countries, you may have to pay SEPA or SWIFT payment fees, which add up quickly.

If your business is expanding globally and you need to carry out international transfers, Tide may not be the right choice for you, and you’ll need to widen your search. We suggest looking at alternatives such as Wise Business, Revolut Business, and Payoneer. 

Tide Advantages

• Invoicing included in all membership plans;
• FSCS protection for ClearBank deposits;
• Fee-free card transactions abroad (£1 for ATM withdrawals);
• No credit checks are required at application;
• Option to create separate accounts for different purposes;
• Ability to sync accounts with accounting software.

Tide Disadvantages

• Doesn’t support international payments (for most members);
• No multi-currency accounts or foreign currency storage;
• Must pay extra for dedicated support;
• Fee applies to direct debits and cash deposits;
• Cheque deposits not accepted.

Tide Plans

Tide accounts break down into three tiers as follows:

• Free: For no monthly fee, you get UK bank account details and a business Mastercard that is linked to Tide's multi-purposed software for tracking spending, tax reporting, and receiving payments. Extra cards cost £5 and bank transfers in and out cost 20p per transfer.
• Plus: For £9.99 per month, get dedicated in-app and phone support plus legal advice. The plan includes 1 extra card for your team. 20 transfers per month are free.
• Cashback: At £49.99 a month, you get a dedicated account manager and 0.5% cashback with your Tide card. Your team gets 3 extra cards, and you are allotted 150 transfers a month for free.

Final Word

Tide is a mission-driven company dedicated to supporting small businesses in the UK that are looking to grow and scale. It is a good free banking option for sole traders and freelancers that invoice their customers. Starling Bank, for example, does not offer invoicing for free and instead charges a monthly fee. If you are a business that deals with cash or cheques often, then Starting Bank may suit you better because Tide does not accept cheques at the moment.

Payoneer in Short

Payoneer offers only one account, which is free to sign up for and allows enterprises big and small to expand into global markets, request payments locally, and withdraw revenue into a local bank account. You will also be able to pay your value-added tax in the UK directly from your Payoneer balance fee-free. This is a great alternative to paying a fee for wire transfers or for withdrawing funds to your local bank. Instead of offering tiers of paid services, Payoneer has a complex schedule of fees, which we will detail below.

Payoneer Advantages

• Get paid into local bank accounts;
• Coverts foreign currency at the mid-market rate;
• Withdraw multi-currency earnings into local account at low cost;
• Pay UK's VAT directly from Payoneer balance;
• Connect with thousands of online marketplaces;
• Access working capital and manage cash flow
• 24/7 multilingual support.

Payoneer Disadvantages

• Charges fee to withdraw Payoneer balance to your UK bank;
• Charges fixed transaction fee when converting foreign revenue;
• Charges annual fee for Payoneer's MasterCard.

Payoneer's Fee Schedule

In short, Payoneer is an infrastructure that connects you to a global network of customers, suppliers, and marketplaces online. Thus, you will be charged a fee for gaining access to this powerful service. Payoneer will charge you fees for getting paid, withdrawing funds to your local bank, and paying suppliers.

Transactions done with other Payoneer users are free, whether you are paying them or are getting paid. Receiving payments into your Payoneer provided account details is free for all currencies but USD. Receiving USD may cost 0 to 1% of the transaction, depending on the country. If you get paid from marketplaces, such as Airbnb or Fiverr, check their sites for details because their fees may vary.

• Get Paid: Payments by credit card will cost you 3% per transaction, regardless of currency. If you get an ACH bank debit from an American customer, that will cost 1% per transaction.
• Withdraw to Bank: The principle here is to avoid foreign currency exchanges. Withdrawing your GBP Payoneer balance to your UK bank will cost a flat fee of £1.50 (the same applies to USD to USD banks and EUR to EUR banks).
  
  Foreign currency withdrawals (i.e. USD Payoneer balance to GBP account in the UK) will cost 2% of the transaction.
  
  Withdrawing in a non-local currency (i.e. withdrawing your USD into a USD account in the UK) will also cost you 2% per transaction.
• Pay: If you pay suppliers or partners by bank transfer, Payoneer will charge 2% per payment. A fixed fee will also apply if the payment is made in GBP, USD, EUR (£1.50, $1.50, €1.50 respectively).
• Currency Transfer: For each transfer from one currency to another, you will pay 0.5% of each transfer.
• Inactivity Fee: Pay a $29.95 penalty for not making a transaction or Payoneer card payment in 12 months.

Final Word

What are we find most impressive about Payoneer is its global infrastructure that puts you in contact with the world’s largest and most far-reaching online marketplaces. The software eases the process for customers to pay you, making it the most attractive online business bank account on this list for the self-employed in the e-commerce businesses. The added bonus of low fees for international money transfers makes Payoneer an ideal solution for those hoping to expand their reach into an international customer base. 

Revolut Business in Short

Revolut is not a bank, but an electronic money institution, registered with the FCA in the UK, that helps you connect your UK business to global markets by accepting international card payments, euro payments with a dedicated IBAN, and foreign exchange at the mid-market exchange rate.

Opening up a 'Standard' account with Revolut is completely free and will get you access to both UK and EU account details. The Euro account will save you money if you have many customers in the EU. The Revolut business account accepts payments from UK cards, international cards, Revolut Pay, and UK easy bank transfers.

Regardless of your plan, Revolut charges 1% + £0.20 for each online payment that you receive from customers using a UK card. All other cards will cost you 2.8% + £0.20 for each online payment. This is fairly competitive considering that major payment platforms, like Square, charge 1.9% for EEA and UK cards or 2.9% for all other cards.

Revolut Business Advantages

• Low online payment acceptance fees;
• Free to create and send invoices;
• Advanced mobile app with a range of features;
• Competitive exchange rates;
• Option to fix future foreign exchange rates online;
• Quick and easy to open an account;
• 24/7 priority support and can cancel anytime;
• Ability to integrate with business software packages.

Revolut Business Disadvantages

• No option to pay in cash or cheques;
• Small 0.4% markup on FX for the Freelancer Free plan.
• Daily withdrawal limit of £3,000.00 and monthly limit of £100,000.00;
• 2.00% cash ATM withdrawal fee;
• No overdraft facility;
• Plan costs can be high.

Revolut Business Plans for Freelancers

Here's a full overview of Revolut's different freelancer account offerings:

• Free: With zero up-front costs, the Free option offers a digital current account (with EU IBAN and UK account number) with no monthly fee and 5 free local payments. Metal cards will cost you £49. Offering no free monthly allowance for international payments or foreign exchanges, this account is ideal for sole traders that don't conduct business abroad.
• Professional: At £7 per month, 'Professional' accounts allot to you 20 free local payments, 5 free international payments, and £5,000 allowance of foreign exchange at the interbank exchange rate. API integration kicks in at this stage too.
• Ultimate: For £25 per month, the 'Growth' plan gives you 100 free local payments, 10 free international payments, and a £10,000 allowance of foreign exchange at the interbank exchange rate. It comes with 1 metal card.

Final Word

Revolut is among the best online business accounts available on the market now in the UK and around the world. Its free plan already gives you access to a multi-currency current account and Revolut's finance management software, making it an attractive alternative to high-street banks. With free international payment and foreign exchange allowances, Revolut's upgraded plans tend to suit businesses that often trade abroad.

Wise Business in Short

Applying for a Wise Business account requires applicants to share their Companies House business registration details, where you’re located, the industry you’re in, and personal details of company stakeholders. In addition to sole traders and limited and public companies, Wise Business also supports freelancers, partnerships, charities, and trusts in the UK — far and away more wide-ranging than other online banks.

Wise Business does not directly accept local UK or international card payments like Revolut Business does. But it does integrate with payment platforms like Stripe and Amazon to receive your income. Since Wise Business gives you access to bank accounts in AUD, CAD, EUR, GBP, HUF, NZD, RON, SGD, TRY and USD, you can receive local bank transfers from any of these accounts for free — which is ideal if you have a business partner or supplier in any of these 10 countries.

Wise Business Paid Plan

For a one-time fee of £45, you will be able to unlock the full range of Wise's international banking features:

• Local bank details in the US, Eurozone, Canada, the UK, Australia, New Zealand, Singapore, Romania, Turkey, and Hungary;
• Register direct debits to your account;
• Withdraw money from platforms like Shopify and Stripe;
• Send money and make payments locally and internationally;
• Hold, exchange, and top-up up to 55 currencies;
• Use the batch tool to send hundreds of invoices and payments at once;
• Integrate with administrative and accounting software like QuickBooks;
• Get your first multi-currency debit card free.

Wise Business Advantages

• Receive international payments without big fees.
• Batch pay up to 1,000 invoices and salaries at once;
• Give select employees access to money management;
• Mid-market exchange rate offered for currency transfers;
• Wise card can be used to avoid foreign transaction fees;
• No setup fees or monthly charges.

Wise Business Disadvantages

• One time £45 registration fee;
• Cash or cheque payments aren't supported;
• Negative interest on large Euro account balances;
• Fees to top up the account via debit and credit card;
• Tight limits and conditions to fee-free ATM withdrawals.

How Wise Business Works

To get a sense of how you can leverage Wise Business, let's say that you conduct sole trader business in Portugal and you'd like to pay a supplier in Euros. With the Wise Business Account, you'll be able to:

1. Send British pounds from your bank account to your Wise GBP account;
2. Convert GBP to Euros at a low fee (e.g. if you add £1,000 and pay with British pounds, the total fee will be around 0.35% or £3.69*);
3. Pay your supplier with your Wise debit card, make or receive SEPA (and SWIFT) payments, or set up direct debits.

Final Word

Unlike the other online business bank account on this list, Wise Business never charges monthly fees, and its one-time fee unlocks truly impressive features. If you are a sole trader who serves international clients, Wise Business will let you get paid like a local in their country. If you’re being charged international transaction fees every time you deal with international clients, then Wise Business might be the right solution for you.

* Conversion made on 01/31/2022

Starling Bank Business in Short

Starling Bank is based in the UK and offers its bank account exclusively to limited companies and sole traders registered in the UK. Their business checking account is packed with more fee-free features than any other free business bank account that we found in the country.

At £0 a month, you still get access to a fully-licensed UK current account, Starling Bank's feature-packed platform, and free Sterling transactions. For an optional monthly fee, you can design your account for services that your business needs, such as tax reporting or business accounts in US dollars and Euros (the US dollar account costs £5 per month).

Starling Bank is designed more for UK sole traders who do business locally, especially in cash and cheque, which is why we recommend them if you do not need foreign currency functionality.

The Starling bank business account is designed best for sole traders and limited companies who operate their business in the UK. Sending money within the UK and receiving Sterling (£) into your account is free. Making payments in Sterling and withdrawing cash from ATMs also incurs no fees.

You will be charged for sending money outside of the UK. Starling Bank will use the exchange rate shown within the international payments page of the app and will charge a 0.4% transfer fee per transaction. If you decide to send with a SWIFT payment, they will charge £5.50. 

Starling Bank Business Add-Ons

Here is the full breakdown of the add-ons that you can purchase to enhance your free online business bank account:

• The Business Toolkit: For £7 a month, you can create and send invoices to customers instantly. The app will calculate and make an HRMC tax report for you as well. This add-on is popular among sole traders and freelancers in the UK.
• Euro Business Account: At £2 a month, you get access to a European IBAN to receive Euros like a local. Hold and send Euros in this account, and spend them with your card like a local in Europe.
• US Dollar Business Account: For £5 a month, you get an American account number for easier payments in the US. Hold and send US dollars, or spend them with your Starling Bank business card.

Starling Bank Business Advantages

• Free to get paid in Sterling and to transfer Sterling;
• No foreign card transaction fees or ATM fees;
• Integrated with Xero, Quickbooks, and others in bespoke app hub;
• Cash and in-app cheque deposit.

Starling Bank Business Disadvantages

• Only offers multi-currency accounts in USD and EUR for a fee;
• Charges exchange rate margin and fixed fees for international transfers;
• Paid upgrade needed to create and send invoices.

Final Word

Starling Bank’s multi-currency add-ons will certainly assist businesses that have important partners or suppliers in Europe or the US. Otherwise, the standard free business account should give you everything you’re looking for in basic banking services and administrative accounting. This is why our experts recommend Starling Bank as a comprehensive option to all sole traders, small business owners, and limited companies — especially those who conduct business exclusively in the UK.

Monzo Business in Short

Monzo’s free business bank account is an ideal option for businesses with small teams that do not require a significant level of management. Integration with accounting software, multiuser access, and saving pots add-ons are only available with the paid option. 

The free option comes with a Monzo business debit card that can be used for payments abroad, free of transaction fees. The software will generate unique payment links for your customers and will also let customers pay with Apple Pay, Google Pay, or card via Stripe.

Monzo Business Advantages

• Integrated with Stripe for customer payments;
• 24/7 award-winning customer support;
• Accepts payments in cash or cheque;
• No international card transaction fees with card;
• Free UK bank transfers.

Monzo Business Disadvantages

• Easy bank transfers are free until 2023;
• No accounting software integration with free plan;
• Invoicing is available in the paid plan only.

Monzo Business Plans:

Monzo offers the two following tiers of membership for their online bank account:

• Business Lite: For no starting or monthly fee, this plan sets your business up with a UK bank account, a Monzo debit card, and Monzo's software. You can schedule payments, separate company money into pots, and transfer money to UK banks for free. Get paid with payment links, Stripe, Google Pay, or Apple Pay, bank transfer.
• Business Pro: At £5 per month, you get all the features of the 'Lite' plan plus invoicing, integration with accounting software, and 'tax' pots to automatically set aside money for paying taxes. Also get multi-user access and a free 6-month trial of Xero.

Final Word

Ultimately, Monzo business’s free plan gives you all the essentials for banking like a high-street bank, but for free and online. However, it lacks important features for account management, invoicing, and other convenient tools to streamline admin. This is why Monito recommends Monzo Business for freelancers and small businesses that can keep track of their own expenses and do not have a need to manage large teams and budgets. If you decide to upgrade for a low £5 a month, then Monzo may be a good option for small businesses in the process of scaling.

ANNA Money in Short

ANNA Money gets you to access a UK bank account, which accepts direct debits for free. You can also share a payment link with your customers to get paid digitally, schedule repeat payments, make bulk payments for payroll, and manage multiple cards. You can also take pictures of receipts instead of carrying around paper ones to neatly track expenses.

ANNA Money Advantages

• Create, send, and chase invoices;
• Instant in-app payment notifications;
• Connect with multiple bank accounts;
• Helps you calculate the tax you owe and has tax reminders;
• 24/7 customer support available in-app and on phone;
• Generate personal payment links for online payments;
• Set up process in under 10 minutes.

ANNA Money Disadvantages

• No multi-currency accounts or foreign currency storage;
• No fee for local transfers in and out for the first two plans;
• High fees for paying in cash.

ANNA Money Plans

ANNA Money breaks down into three tiers as follows:

• Pay As You Go: This costs £0 per month and gives you a free MasterCard. You will be charged 20p per local transfer in and out, 1% for currency conversions, 1% for accepting payments via payment link, and £1 per ATM withdrawal.
• Business: For £14.90 per month plus VAT, this plan essentially has higher limits on all the services included in the free plan. You will get three free withdrawals per month (then £1 per withdrawal), up to five additional debit cards included (then £3 per card per month), and 50 free local transfers per month (then 20p per transfer).
• Big Business: For £49.90 per month plus VAT, every service is either free or unlimited. Only international payments are limited to 4 free per month, then £5 per payment.

Final Word

ANNA Money is an excellent pay-as-you-go business bank account and accounting management system for self-employed freelancers and sole traders. It has just about everything you need to bring your accounting to a professional level and take the headache out of the tedious work — as long as you don't deal too much with international transactions. With the added bonus of personal customer support, ANNA Money is a highly recommended financial service.

Mettle in Short

Mettle's free business bank account limits sign-ups for sole traders and limited companies with no more than two owners, meaning that Mettle was truly designed for freelancers and small businesses.

Its invoicing tool is all done in one place on the app, where you can easily send invoices, view the status of each invoice, and chase payments. Mettle gives you access to FreeAgent's accounting software for free too. This is a great deal since FreeAgent is a competitor of well-known Xero and Quickbooks. If you already have accounting software, then you can easily integrate it with Mettle.

Mettle Advantages

• No monthly fees or transaction costs;
• Associated with NatWest;
• Create and send invoices with your company's logo;
• Set and manage recurring payments in-app;
• Export expense data easily;
• Sync account with FreeAgent, Xero or QuickBooks;
• Can save aside money in Pots.

Mettle Disadvantages

• The maximum balance for sole traders is £50,000;
• Doesn’t support international payments;
• No multi-currency accounts or foreign currency storage;
• You can't pay cheques into the account.

Final Word

Mettle is a great online bank option for sole traders in the UK who are seeking maximum simplicity. Because the bank accounts are issued by NatWest, you get all of the benefits of deposit insurance and security while still enjoying the user-friendly features designed by a fin-tech company. With no fees for sign-up, monthly maintenance, domestic transactions, or cash deposits, Mettle is one of the cheapest options on this list.

HSBC in Short

HSBC Kinetic gives you access to a business account with one of the UK's largest banks and allows you to leverage debt to propel your business, which includes credit cards, overdrafts, and business loans of up to £10,000. You can make payments of up to £25,000 per day in-app too. In addition to these powerful traditional banking features, the HSBC Kinetic app provides you with modern software that automatically categorises transactions to help monitor spending and shows insights that help you manage your money better.

HSBC Advantages

• Make payments of up to £25,000 per day in-app;
• Freeze and unfreeze your debit card instantly;
• Get funds with an easy in-app overdraft application;
• Track a monthly breakdown of cash flow and categorised spending;
• Access on your desktop or mobile device;
• Scan and deposit cheques securely in the app.

HSBC Disadvantages

• Charges monthly fee after 12 months;
• Requires a credit check to apply;
• Cheques not issued for the HSBC Kinetic;
• Multi-user access is not available.

Final Word

HSBC Kinetic is a highly customer-rated sole trader business bank account offered by one of the UK's largest high-street banks. Despite its monthly maintenance fee, you can access HSBC's loans and credit cards to leverage your company with debt, if needed. You can also get in-person assistance from HSBC representatives at your local bank branch, which is a service that UK neobanks cannot provide.