Starling sole trader account vs business account. What is the right choice?

Starling Bank is a popular choice for businesses in the UK, especially for those looking to manage their banking digitally.

In fact, over 500,000 of them have signed up for its free digital business account since Starling Bank launched in 2014. The challenger bank has also earned a 4.3 ‘Excellent’ rating over on review sites like TrustPilot.¹

If you’re thinking of signing up with Starling Bank, you’ll be faced with a choice. Should you choose a business account or a sole trader account?

Here in this guide, we’ll look at the Starling sole trader account vs. the business account. We’ll compare features, fees and eligibility criteria, so that you can make the right choice.

We’ll also throw an alternative into the mix, the Wise Business account. It’s a powerful multi-currency account that works brilliantly for both sole traders and limited companies, and it could suit your needs better.

📝 Table of contents
Starling business account review Starling business account eligibility Starling sole trader account review Starling sole trader account eligibility Starling business and sole trader fees Starling sole trader account vs business account - final comparison Wise Business Account: alternative to Starling Bank

Starling business account review

Starling Bank’s main business account is designed for Limited Companies and Limited Liability Partnerships.

It’s free to open and comes packed with features from the get-go. This includes the following:

• Free UK bank transfers and ATM withdrawals
• Integration with accounting tools like Xero and QuickBooks
• Free access to multiple directors
• Automated business spending categorisation
• Receipt capture
• Connect other business accounts
• 24/7 UK customer support
• Business international payments
• Cash deposits at the Post Office.

Accounts are managed through online banking and Starling’s user-friendly mobile banking app.

You can also customise your Starling business account with optional add-ons such as the Business Toolkit, to streamline your bookkeeping. You can open a linked Euro business account or USD business account, or access Starling business loans.

Starling Bank is a fully licensed UK bank, regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS). This provides protection up to £85,000 for each account.

It protects your business finances with sophisticated security measures such as biometric identification, 3D Secure for online payments, instant notifications and in-app card controls.

Read more: Revolut vs Starling Business Account: comparison for the UK

Starling business account eligibility

To open a Starling business account, you’ll firstly need to check that your company meets the eligibility requirements. It must be:²

• A Limited Company or Limited Liability Partnership
• Registered in the UK with Companies House
• Managed (by Persons of Significant Control) by UK residents
• Not engaged or linked to restricted activities.

Discover Wise Business account, a powerful multi-currency account, with no monthly subscription fees. Wise can help your business to send and receive money across borders in a simple and fair way.

💡Learn more about Wise Business

Starling sole trader account review

Alongside its standard business account, Starling Bank also offers a specialist account just for sole traders.

It’s designed for self-employed people who run their own business or work as a freelancer or contractor. The main benefit of having a sole trader account is to keep business and personal finances separate, as well as accessing useful accounting and financial management tools.

If you don’t have a registered company, the Starling Bank sole trader account is a better fit.

It offers the following features, most of which are shared with the standard Starling Bank business account:

• Free UK bank transfers
• Connect to accounting tools such as Xero and QuickBooks
• Instant payment alerts
• Bills Manager tool
• 24/7 UK customer support
• Capture receipts
• Cash and cheque deposits.

Just like with the business account, you can add optional subscriptions to your Starling sole trader account.

While you can’t add multi-currency business accounts, you can add the Business Toolkit for an extra monthly cost. This gives you access to instant invoicing, automated expenses and bookkeeping, tax estimation, VAT submissions and more.

Read more: Startling Bank vs Tide: Business Account Comparison

Starling sole trader account eligibility

Unlike with the business account, there’s no specific eligibility criteria for the Starling Bank sole trader account. Applications are assessed on a case-by-case basis, using eligibility checks and credit data to understand the nature of your business. ²

With Wise Business sole traders and freelancers can receive money in 8 major currencies. If you trade across borders a multi-currency account from Wise can be a better option over Starling.

💡Learn more about Wise Business

Starling business and sole trader fees

When choosing a new business account, one of the most important factors to consider will always be the cost. You need to check out all the fees, charges, interest rates and other terms and conditions.

With this in mind, here’s a quick rundown of the main Starling business account fees you need to know about. These are the same for both the business and sole trader accounts.

Features and services	Fees³
Open business or sole trader account	Free
Business toolkit	£7 a month
Bulk payments	£7 a month
Receive money into account	Free
Cash deposits through Post Office	0.7% or £3 (whichever is higher)
ATM withdrawal in the UK	Free

Starling sole trader account vs. business account - final comparison

Still not sure which account is right for you? Here’s a useful at-a-glance comparison to help you decide:

	Sole trader account	Business account
Free to open account	✅	✅
No monthly fees	✅	✅
Optional linked EUR + USD accounts	❌	✅
Optional Business Toolkit	✅	✅
Must be a registered company	❌	✅
Connect to business tools	✅	✅
24/7 UK customer support	✅	✅
Debit card	✅	✅
Manage through online and mobile banking	✅	✅
Capture receipts	✅	✅
Deposit cash	✅	✅
Instant payment alerts	✅	✅

Wise Business Account: alternative to Starling Bank

Of course, Starling Bank isn’t the only business account provider out there. It’s always worth shopping around to compare all of your options before signing up for a new account.

The Wise Business account is a fantastic alternative, especially for companies that trade internationally, buy goods or employ people from other countries. It’s also ideal for sole traders and freelancers who spend time abroad or work across international borders.

Just like Starling Bank, Wise aims to make business banking simpler. There’s just one powerful online account, with no monthly subscription fees.

Features include:

• Local account details for 8 major currencies
• International payments to 70+ countries for low fees and mid-market exchange rate
• Employee expense cards - with no foreign transaction fees for spending in 150+ countries, plus spending limit controls and 0.5% cashback
• API integration with business and accounting tools
• Bulk payments - batch pay up to 1,000 people at once
• Bespoke permission levels to control team access.

With Wise Business you can even earn a return on the money you hold in multiple currencies. With Wise Interest, you can get a 4.82% variable rate on your GBP balance held in your Wise Business multi-currency account.

Capital at risk. Current rates do not guarantee future growth.

Variable rate is based on 7 day performance as of 10 Aug 2023. This fund has returned an 0.93% annual average over the last 5 years, excluding Wise and fund manager fees. See full 5 year past performance of funds

Wise is UK regulated, and uses sophisticated security measures to keep your business details and finances safe.

Over on TrustPilot, Wise Business account reviews are positive - giving Wise a score of 4.3 based on over 193,000 reviews.⁴

Read more: Wise vs Starling Business Account: comparison for the UK

Wise Business account fees

So, how much does it cost to get and use the Wise Business account? Let’s take a look at the main fees - and the fee-free features - you need to know about:

Service	Fees
Open a business account	£45 one-off fee
Receive payments	- Free in 8 major currencies - $4.14 for receiving USD wire payments
Send payments	From 0.43%
ATM withdrawals	- Free up to £200 a month (max. 2 withdrawals - 1.75% + £0.50 above that
Currency exchange	Mid-market exchange rate, with no mark-ups

Open a Wise Business account

It’s pretty simple to open a Wise business account online. You’ll just need some details, documents and a few minutes of your time.

Just follow these steps:

1. Go to the Wise website and click ‘Create account’ to register
2. Provide details about the business - this includes business name, entity type, registered address and registration number. You’ll also be asked to provide information about the company directors.
3. Provide details about yourself as the account representative or director.
4. Upload a photo or copy of your photo ID and proof of address when requested. You might also be asked to upload copies of your business documents. The requirements vary based on entity type.
5. Pay your one-time set-up fee.
6. Wait for your account to be verified - this usually takes less than 10 working days.

And that’s it. Once your account is opened, you’ll be able to start making use of its features and tools right away. This includes ordering Wise Business cards, making transfers and sending invoices to your global clients and customers.

Get started with
Wise Business 🚀

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And that’s it - everything you need to know about Starling Bank business accounts. It can sometimes be difficult to find the right fit for your business, especially if you’re just starting out.

But hopefully after reading our rundown of the Starling sole trader account vs. the business account, you’ll have a better idea of which one to choose. The two accounts are pretty similar in terms of features, but the sole trader account could be a better choice for non-registered UK businesses.

Or perhaps you want to look elsewhere for your new digital business account?

There are lots of great options out there, including the Wise Business account. It’s tailor-made for truly international businesses and entrepreneurs, and could save you both time and money.

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Sources used:

1. TrustPilot - Starling Bank
2. Starling Bank - Help - How do I sign up for a business current account or sole trader account?
3. Starling Bank - Rates, Fees and Charges
4. TrustPilot - Wise.com

Sources last checked on date: 27-Jul-2023