How to switch your business bank account in the UK

Switch your business bank account in the UK

The rise of challenger banks and fintechs means businesses have more choice in how they manage their finances. Switching business bank accounts has never been easier, and could save you a lot of money and stress. 

If you’re tired of clunky, outdated systems, poor customer service and unnecessary charges, here’s how you can switch.

How to switch your business current account

The switching process for business bank accounts is relatively stress-free. You don’t even have to leave your home or office.

Before we continue, a quick note about the current account switch guarantee. This service was designed to make switching bank accounts easy for individuals and small businesses. If your business has fewer than 50 employees and an annual turnover not exceeding £6.5 million, you may be able to use the current account switching service, which means your new bank will move all your payments, direct debits and standing orders for you and your old bank will take care of closing your account. After the switch, any money sent to your old account will be redirected to your new account. If anything goes wrong, your new bank will refund any charges incurred because of the switch.

If you are eligible for the current account switch guarantee, you simply need to apply for a new business bank account (see step 1 below) then pick a switch date, everything else will be taken care of. If your business is not eligible or your chosen business account is not part of the current account switch service, don’t worry, simply follow the steps below.

1) Apply for a new business bank account 

Once you’ve chosen the account that’s right for you and checked that your business fits your new provider's eligibility criteria, you can apply online. You will need to provide them with some information and documentation, such as:

• The name of your business or charity

• Your trading address

• Your Companies House registration number

• An HM revenue and customs certificate

• Proof of identity, such as a picture of your passport or driving license

• Certificate of incorporation, memorandum and articles of association (if you’re a limited company)

• Proof of address, such as a bill or bank statement (if you’re a sole trader or freelancer)

It should take 3-10 working days for your new account to be up and running.  

2) Update your collections process and invoices

If you collect payments via invoice, email your customers to let them know you’ve changed your account provider.  If you’re an eCommerce business, update the details in your payment gateway, i.e. Airwallex, Shopify or Stripe. 

3) Update direct debits and standing orders

Do a quick audit of your outgoing payments before you switch to ensure all your direct debits and standing orders are updated. Monthly outgoings may include online advertising, software services and employee benefits.

4) Cancel your cards

Make sure that any cards associated with your account are cancelled and destroyed. If you have a credit card, you may need to do a balance transfer to your new provider. This should be a quick and easy process. Simply inform your new provider that you wish to do a transfer and let them know the details of your old credit card, they will do the rest. You can also request new debit cards from your new provider.

5) Move funds across to your new account

Moving your credit balance to your new current account is free for some providers, but others do charge a fee. 

Login to your old online banking service and select ‘external transfer’. You’ll need your new business account number and sort code, so keep this handy. Your previous provider may want to check that you are the owner of the new account. You can verify that you are the account owner by transferring a small amount (£1) from your new account to your old one. Once you’ve done this, you can transfer all your funds across. 

6) Update your accounting software

If you use accounting software such as Xero or QuickBooks, update your bank feed with your new account details. Doing this immediately will ensure your bookkeeping is kept up to date and you don’t have to chase up any missing transactions.

7) Close your old account 

There’s no pressure to close your old business account when you set up a new one, and many companies choose to keep more than one account running. But be careful, some providers will continue to charge a monthly fee even if you don’t hold money in them. 

In order to close your old account you will need to fill out an account closure form, which can be downloaded from your provider’s website. Once you’ve emailed or posted your account closure form, your account will be closed within 5-10 working days.

Once you’ve closed your account, your statements will no longer be available online. In case you’re audited, ask your previous provider to send your transaction history covering the past five years. 

How to choose your business bank account

Running a business comes with many challenges, but your business bank account shouldn’t be one of them. When choosing a business account provider, make sure their offering matches your expectations and will continue to serve your needs as your business scales.

These considerations should be top of your list:

Financial technology

You shouldn’t have to put up with poor web app functionality and clunky mobile banking software. Ensure your new business account has an easy-to-use interface that offers a real-time overview of your transaction data and comprehensive reporting functionality.

Additional features to look out for include inbuilt expense management software, payment acceptance capabilities (such as shareable payment links), faster international payments and accounting software integrations.

Customer service

When you have a question about your business account, the last thing you want is to be placed on hold. So if you’re tired of listening to hold music, choose a business account which offers a dedicated account manager who will respond to emails quickly and jump on a call when you need. 

Pricing

Do you scrutinise your bank statements? You should, because a lot of business accounts have hidden fees. These include monthly account fees, transaction fees when you collect and deposit money and additional charges for foreign currency transfers and CHAPs payments. It’s worth comparing business accounts on fees and benefits before you commit.

Cards

Research your new provider's company card options and ensure they suit your team structure. Some providers offer multiple employee cards with adjustable spend limits and inbuilt expense management software, meaning you can empower your teams to use their budgets independently, whilst keeping control of spending.

Multi-currency options

Whether you’re making international payments to suppliers or accepting card payments and transfers from international customers, you need a business account that enables you to operate in multiple currencies on a global scale.

Multi-currency accounts allow businesses to receive, hold and send money in several currencies without being subject to unnecessary FX conversions or fees, so you can trade across borders without the red tape. Use our handy guide to compare business accounts on features, benefits and fees.

Security

It goes without saying that when it comes to your money, security and reliability matter. Make sure that your chosen provider is fully regulated by the financial conduct authority or an equivalent body, and do some research on how they keep your funds secure.

Switch to an Airwallex business account

Airwallex is a global business account designed for businesses that operate across borders. We make it easier and cheaper to accept international payments by allowing you to open 11+ foreign currency accounts in a tap, with no monthly account fees.  

Airwallex offers market-leading exchange rates and zero international transaction fees, giving you a chance to cut the cost of international money transfers and payment acceptance as you scale globally. 

You can also issue borderless Visa debit cards to your team, allowing them to spend in multiple currencies. Create new physical and virtual cards in minutes, set spending limits on a card level, and track spending easily with inbuilt expense management software.   

Airwallex integrates seamlessly with your existing tech stack, including Xero, QuickBooks, Shopify, Magento and more. If you’re looking for an alternative to pricey, outdated business accounts, apply online today. 

Related article: Compare UK business bank accounts