Best business account for contractors UK: which one should you choose?

Contractors don't need the flashiest business account. They need one that works with their company, accountant, invoicing rhythm, tax payments and accounting software.

By Sam Morris

For most UK limited company contractors, Mettle is the best first account to check.

That's not because Mettle has the longest feature list. It's because it solves the contractor problem neatly: no monthly account fee, FreeAgent included if you meet the activity requirement, FSCS protection through NatWest, and a setup that fits a simple personal service company.

Starling is the better pure bank account if your accountant already gives you FreeAgent, QuickBooks or Xero. It's a full UK bank, integrates with the main accounting platforms, and is a good fit for straightforward UK limited companies.

NatWest is the stronger high-street FreeAgent route. Tide is useful if you want invoicing and admin tools built into the account, but the Free plan fees need watching. Revolut Business is mainly for contractors with international clients.

If you're contracting through your own limited company, this isn't the same decision as a sole trader opening a spare account. Your company is separate from you. If that bit is still unclear, start with do you need a business bank account for a limited company?.

The short answer

For a single-director PSC contractor using FreeAgent, choose Mettle first.

For a contractor who already gets accounting software through an accountant, choose Starling.

For a contractor who wants FreeAgent and a bigger banking relationship, check NatWest.

For a contractor who wants invoicing, expenses and admin features inside the account, check Tide.

For a contractor billing overseas clients, consider Revolut Business as a specialist or secondary option.

Most contractors don't care about cash deposits, branches or cheques. They care about bank feeds, invoices, salary, dividends, tax pots and HMRC payments.

Why contractors need a different kind of business account

Contractors aren't quite like ordinary small businesses.

A typical contractor limited company might have one director, one shareholder, one or two agency clients, monthly invoices, a salary, dividends, accountant fees, insurance costs, pension payments and tax reserves. The transaction count may be low, but the records need to be clean.

That's why generic "best business account" lists often miss the point.

A contractor account should help with agency payments, salary, dividends, Corporation Tax reserves, VAT reserves, PAYE, accountant fees, software costs, director's loan tracking and FreeAgent, QuickBooks or Xero integration.

If you've just incorporated for your first contract, read business bank account for a new limited company as well. The application checks are easier when your Companies House details are clean from day one.

What if you work through an umbrella company?

If you work through an umbrella company and are paid like an employee, you normally don't need a business bank account for that income.

The umbrella sits between you and the client or agency. It deals with PAYE, deductions and pays your net wages into your personal account. In that setup, you're not invoicing through your own company.

This article is mainly for contractors using their own limited company, often called a personal service company or PSC.

If you have both arrangements — for example, umbrella work plus a limited company for outside-IR35 consulting — the limited company still needs its own account for company income and costs.

IR35: the banking version

IR35 affects how contractor income is taxed. It doesn't remove the basic banking need for a limited company.

Outside IR35 through your own company, the company invoices the client or agency and pays you later. Inside IR35 through your own company, money may still flow through the company. Umbrella income is different because you're normally paid as an employee.

The banking point is simple: if your limited company receives money, it needs its own account.

What contractors should look for

FreeAgent or accounting software integration

For contractors, this is probably the biggest decision point.

FreeAgent is popular with contractors because it handles invoices, expenses, salary, dividends, Corporation Tax estimates, VAT, director's loan accounts and IR35-related workflows.

That's why Mettle and NatWest matter. NatWest customers get FreeAgent free for as long as they keep the account, with no monthly transaction requirement. Mettle customers also get FreeAgent free, but only if they make at least one transaction a month from the Mettle account.

Low transfer fees

Contractors make regular payments: salary, dividends, VAT, Corporation Tax, PAYE, National Insurance, accountant, pension, insurance and software.

An account that charges per transfer can still be fine, but count your monthly payments before assuming "free" means free.

Tax pots or spaces

A good contractor account should make it easy to ring-fence money for Corporation Tax, VAT, PAYE and rainy-day company cash.

Starling Spaces, Monzo Pots, Mettle tax features and accounting software categories can all help. The account doesn't need to calculate everything perfectly, but it should make it harder to accidentally spend the tax money.

Best business accounts for contractors

1. Mettle — best overall for simple PSC contractors

Mettle is my first pick for many UK contractors.

The reason is FreeAgent.

Mettle includes FreeAgent if you make at least one transaction a month from the Mettle account. For a contractor who would otherwise pay for accounting software, that's a real saving.

Mettle is best for a simple contractor company: a UK-resident owner, low transaction volume, no branches, no complex lending, and a desire to run everything through an app. It's also FSCS-protected through NatWest, which matters if you're holding tax reserves.

The trade-off is access. Mettle supports sole traders and limited companies with up to two owners, but only one owner can access the account. That may be fine for a one-person contractor company. It's less ideal if both spouses are directors and both need proper access.

2. Starling — best pure bank account

Starling is the best choice if you want a cleaner digital bank account and already have your accounting software sorted.

It's a full UK bank, eligible deposits are FSCS-protected up to £120,000, and the account works well for normal contractor banking. No monthly account fee. No Starling fee for normal UK bank transfers. Useful Spaces for tax pots. Integrations with FreeAgent, Xero and QuickBooks.

The drawback is that FreeAgent isn't bundled free in the same way it is with Mettle or NatWest. So if you still need to pay for software separately, Starling can become more expensive overall.

Starling also has stricter eligibility. It's best for straightforward UK-resident directors and PSCs. If your company has overseas directors, complex ownership or unusual activity, it may not be the easiest route.

For cash-heavy construction contractors, Starling business cash deposits at the Post Office cost 0.7%, with a £3 minimum. Most PSC contractors won't care.

3. NatWest — best FreeAgent high-street route

NatWest business current account customers get FreeAgent free for as long as they retain the account. There's no monthly transaction requirement — unlike with Mettle, you don't need to keep transactions flowing to keep the software access.

That makes NatWest useful if you want the FreeAgent benefit but prefer a bigger bank relationship than Mettle. It can make sense if you expect to need borrowing, credit cards or broader business products.

The downside is that NatWest may feel heavier than Mettle or Starling. NatWest's Start-Up account also offers up to 24 months of free everyday transactions when you switch via the Current Account Switch Service, then reverts to a £5/month standard tariff. For a one-person contractor who just wants FreeAgent and a simple account, Mettle is probably cleaner.

4. Tide — best for invoicing and admin tools

Tide is useful, but it's not my top contractor pick.

It works best for contractors who want business admin inside the account: invoicing, expense management, paid plan features, team access and workflow tools.

The issue is cost. Tide's Free plan charges 20p per outgoing UK transfer. ATM withdrawals cost £1 across all plans. Foreign currency card payments on Tide's Free plan carry a 1.75% FX fee, which drops to 0% on the paid plans (Smart, Pro and Max).

Tide also isn't a bank in the same direct way as Starling. Tide is the platform. ClearBank provides the business current account behind the scenes, and eligible deposits in the ClearBank-powered account are FSCS-protected.

Tide makes sense if you value invoicing and admin features more than the FreeAgent bundle.

5. Monzo Business — best if you want the Monzo app

Monzo Business is clean and easy to like.

The app is strong, Pots are useful for tax planning, and the paid business plans support accounting integrations with Xero, FreeAgent, Sage and QuickBooks.

The problem is that the best contractor features sit behind paid plans. Monzo Pro starts from £9 a month, and integrated accounting is a Pro or Team feature. Monzo Business Lite — the free tier — doesn't connect to Xero, QuickBooks, FreeAgent or Sage.

6. Revolut Business — best for international clients

Revolut Business is worth considering if your contractor income is international: euros, dollars, overseas clients, travel or foreign currency balances.

For a normal UK contractor billing a UK agency in pounds, Revolut isn't the default answer. Also be careful with FSCS wording. Revolut Bank UK Ltd became a licensed UK bank on 11 March 2026, but customer migration is gradual and the exact entity matters. Some Revolut Business customers are still onboarded to Revolut Ltd, the e-money entity, while the migration completes.

If you're a non-UK resident director, also read business bank account for a non-UK resident director.

Bank vs EMI: why contractors should care

A contractor company can hold real money. VAT, Corporation Tax, retained profits and unpaid dividends can build up quickly.

Starling, NatWest, Mettle and the major high-street banks are bank-backed routes with FSCS protection for eligible deposits. Tide is different but still has a bank layer: Tide Business Current Accounts are provided by ClearBank, and eligible deposits in those accounts are FSCS-protected through ClearBank.

Some fintech accounts are e-money accounts. E-money safeguarding isn't the same as FSCS protection.

If the account will hold serious tax reserves, know exactly where the money sits and whether FSCS protection applies.

Does Making Tax Digital matter for contractors?

For a limited company contractor, Making Tax Digital for Income Tax isn't the reason to choose a business account.

MTD for Income Tax applies to sole traders and landlords with qualifying income above the thresholds. It doesn't apply to limited companies. MTD for Corporation Tax has been shelved.

A contractor could still be affected personally if they also have self-employment or property income above the threshold. VAT MTD can also matter if the company is VAT-registered.

But for choosing a contractor business account, the bigger issue is clean bookkeeping: bank feeds, invoices, tax reserves and records your accountant can actually use.

If you're still deciding whether to trade as a sole trader or limited company, our guide to free business bank accounts for sole traders may help with the sole trader side.

Our view

For most UK PSC contractors, choose Mettle first.

The FreeAgent bundle is too relevant to ignore. Contractors are one of the clearest use cases for FreeAgent, and Mettle gives you the software-account combination without a monthly account fee, provided you meet the activity rules.

Choose Starling if you already have accounting software through your accountant and want the cleaner bank account.

Choose NatWest if you want FreeAgent without the monthly transaction requirement and prefer a bigger banking relationship.

Choose Tide if invoicing, expenses and admin tools matter more than FreeAgent.

Choose Monzo Business if you love the Monzo app and are happy paying for Pro or Team.

Choose Revolut Business if international clients or foreign currency are a genuine part of your work.

For a standard contractor company, that usually means Mettle, NatWest or Starling. Mettle if FreeAgent matters and you're happy with monthly activity. NatWest if FreeAgent matters without the activity rule. Starling if the bank account matters more than the bundled software.

FAQ

What is the best business account for contractors in the UK?

For many UK limited company contractors, Mettle is the best first account to check because it includes FreeAgent if you meet the activity requirement. Starling is the better pure bank account if you already have accounting software, and NatWest is worth considering if you want FreeAgent without the monthly transaction requirement.

Is Mettle good for limited company contractors?

Yes, Mettle is a strong fit for simple PSC contractors. It suits single-director or simple limited companies that want FreeAgent included and don't need branches, lending or complex account access.

Do contractors need a business bank account?

If you contract through your own limited company, yes, the company should have its own business account. If you work through an umbrella company and are paid as an employee, you normally don't need a business account for that umbrella income.

Which business account includes FreeAgent?

NatWest business current account customers get FreeAgent free for as long as they retain the account, with no monthly transaction requirement. Mettle includes FreeAgent if you make at least one transaction a month from the Mettle account. Both are part of NatWest Group.

Is Tide good for contractors?

Tide can be good for contractors who want invoicing, expenses and admin tools built into the account. It's less compelling if your main priority is FreeAgent, because Mettle and NatWest are stronger on that point.

Does IR35 affect which business bank account I need?

IR35 affects tax treatment, not the basic need for a company bank account. If money flows through your limited company, the company still needs its own account. If you're paid through an umbrella company, that income usually goes to your personal account as employment income.

Does Making Tax Digital apply to limited company contractors?

MTD for Income Tax doesn't apply to limited companies. It can apply personally if you also have qualifying self-employment or property income above the thresholds. VAT MTD can apply if your company is VAT-registered.

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Sam Morris is the pen name of the founder of comparebusinessbanking.com.