Complete Guide to Business Bank Accounts in the UK: From Tide to PayPal

Setting up a business account is a crucial step for any entrepreneur, freelancer, or company looking to manage finances professionally. In this blog, we’ll walk through different types of business accounts available in the UK — from traditional banks to modern digital solutions like Tide, Starling, and PayPal. Each section will help you understand their features, benefits, and which one is right for your business.

What is a Business Account?

A business account is a dedicated bank account used to manage a company’s income, expenses, payroll, taxes, and financial transactions. Unlike a personal account, it is designed with tools and features that support business operations such as invoicing, VAT management, and integration with accounting software.

Why it’s important:

Separates personal and business finances.
Improves bookkeeping and tax reporting.
Builds professional credibility with clients and vendors.

Tide Business Account

Tide is a leading UK digital business banking platform that offers quick and paperless account opening. It’s ideal for startups, freelancers, and SMEs.

Key Features:

Free business current account.
Instant invoicing and expense categorisation.
Integration with Xero, QuickBooks, and more.
No monthly fees (basic plan).
Open an account in minutes via app.

Pros:

Fast setup without visiting a branch.
Great for entrepreneurs needing a flexible mobile-first solution.

Cons:

No physical branches or cash deposit facilities.

Open a Tide Business Account: You can apply directly via the Tide app with just your business registration number and ID.

Business Tax Account

Your business tax account is set up with HMRC (Her Majesty’s Revenue and Customs) to manage and pay taxes online. It’s different from a bank account but equally essential.

Key Features:

File VAT returns and corporation tax.
View payment history and tax liabilities.
Manage PAYE if you employ staff.
Apply for tax refunds or make corrections.

How to Set It Up:

Register your business with HMRC.
Create a Government Gateway ID.
Access the “Business Tax Account” dashboard online.

Having a proper business bank account helps keep your tax account clean and compliant.

Best Business Bank Account (UK)

Choosing the best business bank account depends on your needs. Here’s a comparison:

Bank	Monthly Fee	Overdraft	Cash Deposits	App Features
Tide	Free	No overdraft	Limited	Excellent
Starling Bank	Free	Yes	Post Office	Great
Monzo Business	£5 (Pro)	Yes	Limited	Very Good
HSBC	From £6.50	Yes	Yes	Moderate
Lloyds	Free 12 months	Yes	Yes	Good

Best For:

Startups: Tide or Starling.
Cash Businesses: Lloyds or HSBC.
Digital-First: Monzo or Starling.

Business Savings Account

A business savings account helps you grow your surplus funds while keeping them safe. It’s perfect for planning for taxes, reinvesting, or emergency buffers.

Types:

Instant access: Withdraw anytime (lower interest).
Notice savings: Higher interest, but with withdrawal restrictions.
Fixed-term: Best for lump-sum savings over 6-12 months+.

Top UK Business Savings Accounts (2025):

Aldermore Business Savings – up to 4.65% AER.
Shawbrook Bank – competitive rates with flexible terms.
Virgin Money – good for established SMEs.

Royal Mail Business Account

If your business regularly sends parcels or letters, a Royal Mail Business Account can save time and reduce postage costs.

Options:

Online Business Account (OBA) – Manage bulk orders, create shipping labels, and access discounts.
Business Credit Account – Pay monthly instead of daily.
Tracked Returns & Delivery Confirmation – Professional shipping experience for e-commerce businesses.

Who Should Use It:

E-commerce stores.
Retailers and wholesalers.
B2B companies sending documentation.

PayPal Business Account

PayPal Business is widely used for accepting payments online without the need for a merchant account.

Features:

Accept card payments globally.
Integrates with Shopify, WooCommerce, Wix, and more.
Issue invoices and set up subscriptions.
Fast withdrawals to bank accounts.

Pros:

Trusted globally.
Easy integration with e-commerce stores.

Cons:

Higher transaction fees than traditional processors.

Business Bank Account Mobile App Features

Modern business banking relies heavily on mobile apps. Top features to look for include:

Real-time transaction alerts.
Invoicing and expense tracking.
Tax estimate tools.
Open banking integrations.
Fingerprint/face login.

Top Apps (2025):

Starling – Best overall UI and real-time features.
Tide – Top for invoicing and categorisation.
Monzo Business – Excellent budgeting features.
Revolut Business – Multi-currency and FX tools.

Open Tide Business Account

To open a Tide business account, follow these steps:

Download the Tide app.
Enter your UK company name or register a sole trader.
Upload a photo ID and video verification.
Receive your digital account and business debit card.

Documents Needed:

Company registration (if LTD).
Proof of ID (passport/driving licence).
Mobile number and email.

Setup is usually done in under 10 minutes with no credit check.

Monzo Business Account

Monzo offers two plans:

Lite (Free): Basic features, no monthly fee.
Pro (£5/month): Invoicing, tax pots, Xero integration.

Highlights:

Budgeting and money pots.
Instant notifications and expense tags.
Open account in minutes from the app.

Best for small businesses or freelancers needing a modern digital bank with great user experience.

Starling Business Account

Starling Bank is award-winning for a reason. It combines free banking, no monthly fees, and excellent mobile features.

Benefits:

Free UK business current account.
Deposit cash via Post Office.
Overdrafts and loans available.
Built-in bookkeeping tools.

Great for scaling businesses and freelancers alike.

Best Business Saving Account

The best business savings account depends on how much access you need to your funds and the interest rates.

Top Picks (2025):

Charter Savings Bank – Fixed-term high interest.
Cynergy Bank – Business notice account with good rates.
Tandem Bank – Green savings with competitive AER.

Tips:

Don’t let money sit in a non-interest current account.
Split savings by goals (taxes, emergencies, growth fund).
Monitor interest rates regularly.

Final Thoughts

Whether you’re a startup, e-commerce brand, or established business, having the right business account setup is essential for smooth financial management. Tide, Starling, and Monzo are changing the game with mobile-first, user-friendly platforms, while PayPal and Royal Mail accounts add extra tools for selling and shipping. Choose based on your needs, not just branding — and always keep personal and business finances separate. Visit TakePayments