Business bank account fees in the UK usually mean a monthly charge of anything from nothing to around £10 for a standard plan, plus smaller costs every time you pay, get paid, handle cash or send money abroad. The headline fee is only part of the bill. What you actually pay depends on how your business uses the account.
This guide breaks down each type of charge, shows where the extra costs hide and explains how to work out the real price before you open an account. Fees change often, so treat every figure below as a typical range and check the provider’s current tariff before you decide.
Business bank account fees at a glance
| Fee type Typical UK range Who feels it most | ||
| Monthly account fee | £0 to about £10 a month for a standard plan | Every account holder |
| Electronic payments in and out | Free to about 30p each | Businesses with many small payments |
| Cash paid in or out | About 50p to £1.60 per £100, often a percentage with a minimum charge | Shops, cafes, market traders |
| Cheques paid in or issued | About 50p to £1.50 each | Trades and landlords paid by cheque |
| CHAPS same-day payment | About £15 to £30 per payment sent | Property deals, large urgent payments |
Some providers bundle most of this into one monthly price. Others charge a low or zero monthly fee and bill each transaction separately. Neither is automatically cheaper, so it pays to compare business bank accounts using your own payment numbers, not just the monthly fee.
Monthly account fees
Most business accounts that charge a fixed monthly fee ask for around £5 to £10. A growing number of accounts have no monthly fee at all, usually with a charge for individual transactions instead. Premium plans with extra features can cost considerably more.
Many providers offer new businesses an introductory deal, often 12 to 24 months of free banking. It is a real saving, but it is temporary. When the free period ends, the account moves to the standard tariff. Put the end date in your calendar and check what the fee will be afterwards.
Some providers waive the monthly fee if you pay in a certain amount each month or keep a minimum balance. That can work for a business with steady cash coming in, but check the condition against your real cash flow.
Transaction fees: payments in and out
Transaction charges are what separate a cheap account from an expensive one. They usually cover:
- Faster Payments and bank transfers, in and out
- Direct debits and standing orders
- Card payments and withdrawals
Pricing models fall into two groups. Pay-as-you-go accounts charge a small amount per payment, which suits a business with few transactions. Bundled accounts include a set number of payments in the monthly fee, which can be better value when volumes are high and predictable.
A simple test: if you make around 30 payments in and out a month, a 30p charge on each is £9. That alone may cost more than a flat monthly fee that includes them.
Cash and cheque fees
Cash is where fees climb fastest. Providers typically charge between about 50p and £1.60 per £100 paid in or taken out. Some quote a flat amount per £100, others a percentage of the cash value, often with a minimum charge on small deposits. Cheques are usually charged per item, commonly from around 50p up to £1.50 each.
For a business that takes a lot of cash, such as a shop, a cafe or a market stall, these charges can outweigh the monthly fee. Branch deposits, Post Office deposits and deposit machines are often priced differently, so look at the tariff for the way you actually bank your takings.
If most of your income arrives by card or transfer, you may never pay these fees, and an account with cheap cash handling would be a feature you pay for and never use.
International payments and CHAPS
Sending or receiving money abroad adds two costs. The first is a transfer fee, which can be a fixed amount per payment. The second, and often the bigger one, is the exchange rate. Many providers add a mark-up to the mid-market rate, and that margin is easy to miss because it is built into the rate rather than shown as a fee.
CHAPS is the UK same-day payment system for high-value or urgent transfers. Providers usually charge the sender somewhere between £15 and £30 per payment, while receiving a CHAPS payment is generally free. It is worth using only when speed really matters. For everyday payments within the UK, Faster Payments is normally free or much cheaper.
Fees people overlook
Beyond the main charges, smaller costs can add up over a year. Check the tariff for:
- Balance conditions. Some providers waive the monthly fee only while your balance stays above a set level, or while you pay in a set amount each month.
- Card replacement. Replacing a lost or damaged card can carry a charge.
- Unauthorised overdrafts. Going overdrawn without agreement can mean much higher interest, and a return item fee if a payment you cannot afford is stopped.
- Unpaid charges on closure. You are normally charged to close an account only if there are outstanding fees or an overdrawn balance to settle.
- Tariff changes. Providers can change fees with notice, so a cheap account today may not stay cheap.
- The end of a free period. The most common surprise for new businesses.
Read the full tariff document rather than the summary box. The cost you did not expect is usually on page two.
Are business bank account fees tax deductible?
Generally, yes. If you are a sole trader or in a partnership, HMRC lists bank, overdraft and credit card charges, and interest on bank and business loans, as costs you can claim as allowable expenses. The repayments of the loan or overdraft themselves are not an expense. If you run a limited company, the costs of running the business are deducted before Corporation Tax is worked out.
Two practical points. Keep your statements as proof of what was charged, because HMRC can ask to see them. And if you use the £1,000 trading allowance instead of claiming expenses, you cannot also claim bank charges. For anything more complicated, check HMRC’s guidance or ask an accountant.
How to compare business bank account fees
Comparing on the monthly fee alone is the most common mistake. A cheaper headline price can turn into a higher bill once your real activity is counted. Work through it in four steps:
- Estimate your month. Count payments in, payments out, direct debits, cash deposits, cheques and any foreign payments.
- Price each item. Take the tariff for each account you are considering and multiply by your volumes.
- Add the monthly fee. The total is your expected monthly cost for each account.
- Check the conditions. Look at free periods, balance requirements, usage limits and what happens when the offer ends.
A side-by-side table makes this much faster. Keep the same four inputs for every option so the results are like for like. Re-do the exercise once a year, because both your business and the tariffs will have changed.
How to keep business banking fees low
- Match the account to your payment mix. Mostly electronic payments suggest a low-fee digital account. Lots of cash may favour an account with cheaper cash handling.
- Reduce cash and cheques where you can. Ask customers to pay by transfer or card, and pay suppliers electronically.
- Use the right payment method. Choose Faster Payments over CHAPS unless the payment is genuinely urgent.
- Watch the calendar. Note when free banking ends and review your options a month before.
- Review yearly. If your volumes have changed, a different account may now cost less.
- Do not pay for features you do not use. Premium plans make sense only if you use what they include.
Frequently asked questionsWhich UK business accounts have no monthly fees?
Several providers offer business accounts with a £0 monthly plan. They usually charge for individual transactions, such as cash deposits, instead. Free banking at high-street providers is typically an introductory offer for new businesses, not a permanent price. Always check what happens when the free period ends.
How can I avoid monthly maintenance fees?
You can use an introductory free banking period, choose an account with no monthly fee, or meet the condition some providers set for waiving it, such as paying in a minimum amount each month. A zero-fee plan works best if most of your payments are electronic and your cash and cheque use is low.
Is it worth getting a business bank account?
For most businesses, yes. A separate account keeps business and personal money apart, makes bookkeeping and tax returns simpler and looks more professional to customers and suppliers. A limited company is legally separate from its owner and must keep business and personal finances apart, so it needs a business account. Sole traders are not legally required to have one, but many providers do not allow personal accounts to be used for business, which makes a separate account the practical choice.
Are business bank account fees tax deductible?
Generally, yes. Bank, overdraft and credit card charges relating to your business are allowable expenses for sole traders and partnerships, and limited companies deduct running costs before Corporation Tax. Keep your statements, and note that you cannot claim expenses if you use the £1,000 trading allowance.
