Limited companies must keep company money separate from personal funds. Mixing them can undermine limited liability and create tax nightmares. Here is how to choose the right business bank account.
Why You Need a Business Account
- Legal requirement for Ltd companies — company money belongs to the company
- Cleaner bookkeeping — separate transactions simplify accounting
- Professional image — named business account builds trust
- Tax compliance — HMRC expects clear separation
High Street vs Digital Banks
High street (HSBC, Barclays, NatWest, Lloyds): branch access, often free for 12-18 months then £5-12/month. Application takes 1-4 weeks.
Digital (Starling, Tide, Revolut, Monzo Business): apply in minutes, usually free or low cost, excellent apps, accounting software integration. No branches.
What You Need to Apply
- Certificate of Incorporation (verify your company on BizLookup)
- Company registration number
- Director ID and proof of address
- Business activity details and SIC code
What to Compare
- Transaction fees — 20-40p per transaction at some banks, unlimited free at others
- Monthly fees — free (Starling) to £12+/month
- Cash handling — need deposits? You need branch or Post Office access
- International payments — compare FX rates if trading overseas
- Accounting integration — Xero, QuickBooks, FreeAgent all connect via Open Banking
Our Recommendation
For most new limited companies, a digital bank like Starling or Tide is the best start: free, fast and well-integrated. Add a high street account later if you need cash deposits or business lending. Use CalcPad to budget running costs.