Why so many UK owners have left the branch behind
More than 450,000 businesses now bank with Starling alone, and the challengers have been joined by Monzo, Tide, Revolut and ANNA. Branch networks have thinned out at the same time. For a sole trader in Sheffield invoicing three clients a month, an app-based current account covers most of it. A limited company with staff, stock and a VAT return has a longer list: extra cards for employees, a Xero or QuickBooks feed, a way to pay in takings, and something to lean on when trade goes quiet.
The friction turns up in specific places. A plumber in Leeds banking £400 in notes each week needs a counter that accepts cash, and app-only accounts still charge for it. An exporter in Reading paying a European supplier loses money on the conversion spread every month. A design studio waiting thirty days for invoices needs a buffer, which is exactly where the free accounts tend to stop.
Cash handling is the detail most people check last. It should be the first. Tide and ANNA both take a percentage of cash paid in, with a minimum charge around £1, so banking £500 in notes can cost roughly £10. Several high street accounts include a monthly cash allowance and charge per £100 after that.
What an entry-level online account really costs
Pricing sits in three places: the account charge, transaction fees, and what it costs to spend or send money abroad. The figures below come from published entry-level pricing on UK provider sites.
| Provider | Entry plan cost | Paying in cash | Overseas use | Protection | Suits |
|---|
| Starling Business Current Account | £0 monthly | Supported, fee applies | No ATM or card fees abroad; EUR and USD accounts | FSCS up to £85,000 | Everyday UK trading with some overseas work |
| Monzo Business Lite | £0 (Pro is £5 a month) | Cash and cheques accepted | Fee-free card spending abroad | FSCS up to £85,000 | Sole traders and small limited companies |
| Tide Business Account (Free) | £0 | 2%, minimum £1 | 2.5% FX plus £1.50 on transfers | FSCS on eligible deposits | Low-volume UK payments |
| Revolut Business Basic | £10 a month, about £120 a year | Limited | 25+ currencies, 10 free UK transfers then £0.20 | UK licensed bank, FSCS on eligible deposits | Regular overseas suppliers |
| ANNA Money Pay As You Go | £0 | 2% | £5 per SWIFT payment | Safeguarded rather than FSCS | Micro businesses needing invoicing and tax help |
| NatWest and RBS Business Current Account | £0 monthly on the entry plan | Branch and Post Office counters | Standard FX rates | FSCS | Cash-heavy local trade |
| Barclays, HSBC and Lloyds business accounts | Roughly £100 to £120 a year on entry plans | Branch counters | Standard FX rates | FSCS | Owners who want a named relationship manager |
Free transfers are not unlimited everywhere. Revolut Basic includes ten Faster Payments a month before a 20p charge, Tide includes five, and HSBC's entry account charges 35p from the first one. On a busy month that gap between "free" and "free-ish" adds up quietly.
The £85,000 figure matters more than the marketing. FSCS cover protects eligible deposits if a bank fails, and it applies per bank, not per account. Some e-money providers hold customer funds in safeguarded accounts instead, which is a different promise. Ask which one you are getting before you move a large balance across.
Free or paid: the decision most owners get wrong
Priya runs a two-person catering company in Birmingham. She started on a free account, then added a £9.99 tier when cash deposits and supplier transfers began to bite, because the allowance covered what she was already paying in fees. Her own sums, not a quote from a brochure.
Sarah, a bookkeeper in Bristol, went the other way. She stayed on a free sole trader account for two years, then moved to a £5 monthly plan purely for the accounting link and invoicing. Her estimate is that the connection saved her about three hours of manual entry each month. Both decisions came from a month of statements, not a comparison page.
Paid tiers only make sense when you use the extras. Monzo Pro adds invoicing, virtual cards and multi-user access. Tide's £29.99 plan bundles international payment allowances and priority support. If you send one payment to Ireland a year, you are buying features you will not open.
Applying without wasting a week
The applications that clear quickly tend to look the same. Have these ready before you start:
- Photo ID for every director, plus a proof of address dated within the last three months
- Your Companies House number if you trade through a limited company, or partnership and sole trader details if not
- A plain description of what the business does and where money comes from, with a contract or invoice to hand
- Expected turnover and typical payment sizes, since this drives limits on new accounts
- Your existing sort code and account number if you want the Current Account Switch Service to move direct debits and standing orders
Most refusals trace back to a mismatch. The registered address and the utility bill do not match. The business description says "consulting" with no evidence of clients. A director's address sits outside the UK. Fix those three and the process usually takes minutes rather than days.
You are not obliged to close your old account. Plenty of owners run a high street account for cash and cheques alongside an app account for day-to-day spending, and treat the overlap as a backup rather than duplication.
Making the account earn its keep after day one
Set up a tax pot and move a percentage of every payment received into it, so the January bill is already funded. Issue separate cards to staff with their own limits instead of lending yours out. Turn on receipt capture at the counter, because reconstructing a quarter of paper in April is the task nobody finishes.
Then diarise a review. Introductory terms expire, cash fees change, and the plan you chose for last year's turnover may no longer fit this year's. Read the fee schedule once every twelve months, during a quiet week.
If two accounts still look level, open the free one and push a normal month through it. The statement at the end of that month will tell you more than any comparison table, including the charges you never expected to pay.
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