Business banking guides for UK sole traders and companies

How to use these guides

Opening a business bank account is quick. The questions around it are what take time. Does a sole trader legally need one? What happens if a limited company’s customers pay the director’s personal account? Which documents does a bank want, and why does it ask about people with significant control? What actually moves when you switch, and what quietly stays behind?

Each guide below answers one of those questions for UK sole traders and private limited companies. The rules come from primary sources: GOV.UK and HMRC for tax and record keeping, Companies House for company details, the Current Account Switch Service for switching, and the banks’ own published pages for account features. Each page lists its sources at the foot and shows the date it was last checked.

Some of it is first-hand. We run a small digital agency as a private limited company and have banked with Monzo Business for a few years, currently on the Team plan. Where a guide draws on that, it says so. Where it describes something we have not done ourselves, such as banking as a sole trader, it says that too. If you want the full first-hand view, the Monzo Business review is the place for it.

Before you open an account

Whether you need a separate account at all, what goes wrong when business money runs through a personal account, the paperwork banks ask for, and whether applying touches your credit file.

Moving and protecting your money

How the Current Account Switch Service moves a business account in seven working days, what it leaves behind, and which accounts are covered by the FSCS rather than e-money safeguarding.

Tax and paying yourself

The Making Tax Digital for Income Tax thresholds and dates for sole traders and landlords, and how limited company directors take money out through salary, dividends and the director’s loan account.

Where to start

If you are a sole trader, there is no law that says you must have a business account, but HMRC expects records that separate business transactions from personal ones, and many personal account terms are written for personal use. The sole trader guide sets out when a separate account is worth it, and the sole trader account comparison covers the options, including free plans.

If you run a limited company, the company is a separate legal person and its money belongs to it, so in practice it needs an account in its own name. The personal account guide and the paying yourself guide explain why, and the limited company account comparison covers which banks suit directors.

If you already bank somewhere and want to move, read the switching guide before you open anything. The service is free and guaranteed, but card-on-file subscriptions and payout settings on platforms such as Stripe or PayPal are your job to update. The best business bank accounts comparison helps you pick where to go.

If you are setting money aside for tax, the Making Tax Digital guide covers the dates, and the tax set-aside calculator works out a percentage to move into a tax pot from each payment. Anything that changes, from tax thresholds to bank fees, gets a dated entry in news.

If you are thinking about Monzo Business in particular, the bonus checker tells you in five questions whether you would qualify for the referral reward. It is only for people who have never had a Monzo account of any kind and who complete the four steps within 30 days.

Frequently asked questions

Are these guides only about Monzo Business?

No. Each guide answers the question for UK sole traders and limited companies in general, using GOV.UK, HMRC, Companies House and the Current Account Switch Service as sources. Where Monzo Business is relevant, the guide explains how it handles the topic, and where another account or a high-street bank suits a reader better, the guide says so.

Which guide should a new sole trader read first?

Start with whether you need a business bank account as a sole trader, which covers the legal position, HMRC’s record-keeping rules and the £1,000 trading allowance. Then read the documents guide before you apply, and the Making Tax Digital guide if your qualifying income is heading towards the thresholds that start in April 2026, 2027 and 2028.

Which guide should a new limited company director read first?

Read the personal account guide first, because company money is not the director’s money and mixing the two creates director’s loan account problems. Then the documents guide, which covers Companies House details and people with significant control, and the paying yourself guide once the account is open and you need to take a salary or dividends.

Do the guides give tax or legal advice?

No. They explain the rules as GOV.UK and the official services publish them, and how bank accounts work, with sources and the date we checked them. Anything that depends on your circumstances, such as how to treat a payment in your accounts or whether to incorporate, is a question for your accountant.

How often are the guides updated?

Monzo figures come from one central facts file that we re-check against Monzo’s own pages, and every page shows its last-updated date. Tax thresholds and switching rules are re-checked against GOV.UK and the Current Account Switch Service. When something changes, we publish a dated news entry and update the guide it affects.