Do I need a Business account in the UK?

So you’ve found your business idea and registered your business. The next step? Think about ‌getting a business account to keep your personal and business finances separate. But it begs the question: do you really need a separate business account?

With 75% of UK private-sector businesses being sole traders or small entities without employees, it makes sense to ask. Opening a dedicated business account can improve how you manage your finances, navigate tax obligations, and grow your business, whether you operate as a sole trader or a larger limited company.

In this guide, we’ll explore whether a business account is legally required for different types of UK businesses, and highlight the benefits of having one. We’ll cover sole traders, partnerships, limited companies, and more, to help you decide what’s best for your set-up. Plus, we’ll show how Revolut Business offers tools that may help you manage your finances more efficiently, whether you’re operating locally or globally.

Please note: this guide is intended for informational purposes only, we do not provide financial advice. Each business has its own specific needs, which may vary. We recommend consulting a financial or legal professional to ensure your set-up meets your individual requirements.

Why consider a business account?

A business account is an account specifically for your business transactions, separate from your personal finances. While not always required by law, it can make your finances clearer and your operations more professional. Here are some key benefits to consider:

• Financial separation: keeping personal money separate from business simplifies bookkeeping and tax reporting
• Professionalism: paying suppliers or receiving customer payments from a business-named account enhances credibility and trust
• Expense tracking: business accounts often come with tools to track spending, helping you manage your cashflow
• Tax compliance: separating transactions makes it easier to calculate profits and file taxes accurately

Business structures and business account requirements

Your need for a business account varies depending on your business structure. The table below lets you know at a glance:

• if a separate business account is legally required
• if your structure suits a separate business account
• key benefits for each type of UK business
• how Revolut Business can support each business type

The UK Government website provides useful guidance on the requirements for different business types for further reading.

“For Limited companies, a business account isn’t just helpful — it’s often expected. It’s the best way to keep personal and company finances separate and compliant.”
Francesco Sabbatini, Revolut Business Account Executive

Risks of not having a separate business account (for sole traders or partnerships)

Mixing personal and business finances in one account can create problems for sole traders or general partnerships:

• HMRC compliance difficulties: it's harder to prove business expenses during a tax investigation if there's no clear separation. This could lead to claims being denied or penalties being imposed

• Violating personal account terms: many personal accounts explicitly prohibit using them for business. Financial institutions may ask you to open a business account or close your personal account if they see a lot of business activity

• Poor financial visibility: it's difficult to accurately track your business's profitability and cashflow when transactions are mixed, especially for general partnerships, who might have two separate partners spending

• Unprofessional appearance: asking clients to pay into an account under your personal name can seem less credible than using a dedicated business account name

How to choose the right business account

Once you've decided a business account is right for you, you should choose the best provider and account type for your specific needs. Here's what to consider:

• Fees and charges: look beyond just the monthly account fee. Check costs for specific transactions (like bank transfers, cash withdrawals, and international payments), currency exchange markups, and any charges for additional features. Always review the fees you might be charged for using the account, and check pricing pages and fee schedules if available

• Features and tools: does the account offer what your business needs? Consider features like invoicing capabilities, expense management tools, multi-user access for team members or employees, physical and virtual company cards, and mobile app functionality

• Integration options: check if the account integrates smoothly with your accounting software. This can save hours, or more, on bookkeeping

• International capabilities: if you trade overseas, pay international suppliers, or receive payments in foreign currencies, look closely at multi-currency account options, international payment fees, and the foreign exchange (FX) rates offered

• Account access and support: you'll use your business account every day. Think about how easy it is to use, either on web or a mobile app. Consider the customer support options available (e.g., in-app chat, phone support, dedicated account manager) and their availability

• Eligibility requirements: providers have specific criteria regarding business structure (Ltd, partnership, etc.), director/owner residency, industry type, and sometimes turnover. Ensure your business meets the requirements before applying

• Scalability: does the provider offer different account tiers or features that can support your business as it grows?

Comparing accounts against your business' current operations and future goals will help you find the best fit. You can see our business account comparison table to get started, we've evaluated some of the options available from Fintechs in the UK.

How Revolut Business can support your financial needs

Whether you’re legally required to have a business account or simply want to manage your money more easily, Revolut Business has the tools that may help you.

• Quick online set-up: open a UK-based business account in minutes

• Multi-currency support: hold and pay in over 25 currencies, like GBP, USD, and EUR, which may help if you’re dealing with international clients or suppliers

• Expense management: track spending with real-time insights, to make sure you're keeping budgets and cashflow in check

Visit Revolut Business to learn more about how our tools might support your business needs. Fees and T&Cs apply.

Wrapping up

Whether you need a business account depends on your business structure and goals. Limited companies, LLPs, PLCs, and overseas companies with UK branches are legally required to have one, while sole traders and partnerships can benefit from the clarity and professionalism it provides. A separate account can make tax reporting easier, make your business more trustworthy, and help you grow — locally or worldwide. Revolut Business offers tools that can help you manage your finances efficiently, so you can focus on building your business.

Quick-start checklist:

1. Identify your business structure and legal requirements
2. Assess the benefits of a business account for your set-up
3. Explore and compare business account providers like Revolut Business to support your needs
4. Consult a financial professional for personalised advice

Stay tuned for more guides on managing your UK business finances.