How to Open a Business Bank Account in the UK

Opening a business bank account is essential for separating your business finances from your personal funds, simplifying bookkeeping, and making tax filing easier. In the UK, limited companies are legally required to have a separate business account. While it’s not mandatory for sole traders, having a dedicated business account is strongly recommended for maintaining clear financial records and projecting a professional image.

Setting up a business account is typically straightforward, and this guide will explain why you need one, the requirements for opening an account, and the step-by-step process involved.

5 reasons why you should open a business bank Account

A business bank account isn’t just a banking formality, it’s a tool that can help you manage your business money better, build your company’s financial identity, negotiate supplier terms and secure business funding. Here are the top reasons to open a business bank account today:

Legal and financial separation

For limited companies, a separate account is mandatory. Sole traders are not required by law to have a business account, but using one is highly recommended to keep personal and business finances separate.

Simplified accounting and tax management

A dedicated account makes it easier to track business income and expenses, simplifying your accounting process. Many accounts also integrate with accounting software, which streamlines your financial management and helps prevent mistakes.

Building business credit

Using a business bank account responsibly allows you to start building a credit history for your company. A strong credit score is really important as this will improve your chances of securing financing in the future (for example, it may help you qualify for business loans on better terms). If you want to know more on this topic, read our article on how to build business credit.

Access to financing and services

Business accounts often offer additional services such as overdraft facilities and business credit cards. Also, having an established account can make it easier to apply for r funding when needed. Banks will typically require you to have a business current account before granting any business loan.

Professionalism and credibility

Paying suppliers or receiving client payments through a business account (in your company’s name) lends credibility. It signals that you’re a legitimate business. It also looks more professional on invoices and cheques to use a business bank account name.

What do you need to open a business bank account?

Before you apply, it’s important to prepare the required information and documents. Banks in the UK will ask for various documents to verify your identity, your address, and your business details due to anti-money laundering rules. While exact requirements can vary by provider and business type, you should have the following ready in most cases:

Proof of Identification: You’ll need to provide a valid photo ID (e.g., passport or driving license) for all account holders or business directors.
Proof of Address: A recent utility bill, bank statement, or council tax bill (dated within the last three months) will be required to confirm your address.
Business Details: If you run a limited company, you’ll need your Companies House registration number or Certificate of Incorporation. Sole traders may need their Unique Taxpayer Reference (UTR) from HMRC to prove self-employment status.
Financial Information: Many banks will ask for an estimate of your expected annual turnover and details of your business’s activities. Be ready to provide a realistic estimate or projections from your business plan.

When filling in the application, you’ll also provide basic contact information (email, phone number) for yourself and any co-applicants, as well as the date of birth and nationalities of company directors or partners.

How to Open a Business Bank Account: Step-by-Step

Opening a business bank account involves the following steps:

Start by comparing different banks and account options to find one that fits your business’s needs. Consider the features that matter most to you. Also, check if the account is FSCS-protected (Financial Services Compensation Scheme), which means your deposits up to £85,000 are guaranteed by the government if the bank were to fail. Nearly all UK high street banks are covered by FSCS, as are licensed digital banks, but some fintech or e-money accounts might not, so this is worth verifying).
Before applying, you should confirm that your business meets the bank’s requirements. Most banks require businesses to be registered in the UK and applicants to be over 18 and a UK resident. you’ll need to ensure your business type and industry meet the bank’s criteria. Some accounts are specific to certain business types, so verify that the account suits your business structure, whether you’re a sole trader, limited company, partnership, or nonprofit. Banks may also have turnover limits, such as accounts for businesses with under £1 million in annual revenue, or higher revenue requirements for private banking accounts. If you’re a new startup, look for accounts that accept businesses with no trading history
Now you’ll need to prepare all necessary documents, such as proof of ID, address, and business registration details. You can usually apply online by filling out an application form and uploading the required documents. It's important to make sure that the details on all of your documents match your application information exactly.
Once submitted, the bank will review your application and perform background checks. While approval can take anywhere from a few hours to a couple of weeks, most online applications are processed quickly. The bank may contact you if additional information is needed, such as further proof of address or clarification about your business.

How long does it take to open a business account?

The time to open a business account varies by bank and situation. Digital banks and fintech providers can often set up accounts within a day if all documents are in order, allowing you to start transactions quickly.

Traditional banks typically take 1 to 2 weeks to fully open an account. This factors in the time to verify documents, perform background checks and mail out your debit card. In rare cases, it might take longer to open a business bank account. This might happen if there are complexities, for example, if some owners are not UK residents, if the bank is swamped with applications, or if there are issues verifying information which require back-and-forth. If your application is taking a long time, don’t hesitate to contact the bank for an update or consider trying a different provider if possible.

Do I need a good credit score to open a business bank account?

Not always. While most banks will run a credit check on you or your business, some providers offer basic business accounts that don’t require a credit check or will accept lower credit scores. These accounts usually have limited features, for example, no overdraft facilities, but they can be a useful starting point if your credit history isn’t perfect.

What’s the difference between digital-only banks and traditional high-street banks for opening a business account?

Digital-only banks tend to be faster to set up ( in some cases, you can open an account the same day) and they often have lower fees and easy to use apps. However, they may not offer in-person services, cheque handling, or the same breadth of products as a high-street bank. Traditional banks usually take longer to open an account (often 1–2 weeks or more) due to extra checks. But they can provide face to face support, a wider product range, and long standing brand recognition.

Opening a business bank account is an important step for managing your finances and projecting a professional image. By choosing the right account and having your documents ready, you can make the process smoother. If you hold excess cash in your business bank account, you can also consider moving it into a dedicated business savings pot to help your money grow. Our roundup of the best business savings accounts can help you pick the right option.

How to open a business bank account