If you want to close a business bank account in the UK, the short answer is this: settle any balance, move your incoming payments and direct debits elsewhere, download every statement you might need, and then ask your bank to close the account in writing or through its app. Most banks will close a business current account within a few days of a clear request, provided the balance is nil and nothing is still coming in or going out.
The longer answer matters, because a rushed closure can bounce a supplier payment, break your accounting records or leave you chasing a bank for statements after the account has gone. This guide walks through the practical steps, realistic timing, the fees to watch and the checks to do first, whether you are switching to a cheaper provider, closing a dormant company account or winding a business down.
Before you start: reasons to close, and reasons to pause
Business owners close accounts for sensible reasons: monthly fees that no longer earn their keep, poor service, a move to a fintech with better software integrations, or simply the end of a company. Cross-border payments providers such as WorldFirst pitch hard at firms that trade internationally, and that competition is a reminder that the account you opened three years ago may no longer be the best fit for how you trade today.
Pause before you close if any of the following are true. You still have live direct debits or standing orders on the account. You are mid-way through a VAT quarter or a Self Assessment period and the account feeds your bookkeeping. You have a business loan, overdraft or credit facility tied to the account. Or the company itself is being dissolved, in which case the order of events matters (more on that below).
The step-by-step process
- 1. Open the replacement account first (if you need one). Never close your only account before the new one is live and tested. Getting a business account approved can take anywhere from a few minutes with an app-based provider to a couple of weeks with a high street bank that wants ID checks and proof of trading.
- 2. Redirect income. Update your invoices, your card payment provider (Stripe, GoCardless, SumUp, Square), your online store and any marketplaces (Amazon, Etsy, TikTok Shop) with the new sort code and account number. Tell regular customers.
- 3. Move direct debits and standing orders. List every outgoing payment: rent, utilities, software subscriptions, HMRC direct debits, insurance, loan repayments. Set them up on the new account. The Current Account Switch Service can automate this for eligible accounts, though many business accounts, especially newer fintech ones, are not covered, so check.
- 4. Download everything. Pull down at least the last six years of statements, plus any documents you rely on for your accounts. Once an account closes, retrieving records can be slow and sometimes chargeable.
- 5. Clear the balance to nil. Transfer remaining funds to the new account and make sure no fees, interest or charges are still due. A £2 monthly fee ticking over can stop a closure going through.
- 6. Request closure in writing or in-app. Ask for written confirmation that the account is closed and the balance is zero. Keep it.
How long does it take?
For a clean account with no balance and nothing pending, closure is usually a matter of a few working days. App-based providers such as Starling, Tide and ANNA Money can often action a closure quickly once the account is empty. High street banks may take longer if they insist on a signed instruction or a branch visit.
The Current Account Switch Service, where it applies, moves payments and closes the old account within seven working days. But it was designed largely for personal and simpler business accounts, so many limited company and higher-turnover accounts fall outside it. Do not assume you are covered; confirm before you rely on it.
Fees and costs to check first
Closing an account is normally free, but the surrounding costs catch people out. Check for a final monthly account fee, any minimum-term or early-exit charges on a paid tier, and fees for foreign currency balances if you hold them. If you trade internationally, moving money out can cost more than the closure itself: this is where providers such as Wise and WorldFirst pitch themselves against traditional bank exchange rates, so compare the true cost of shifting any euros or dollars before you drain the account.
Comparing where to move next
If you are closing one account to open another, the useful question is what you actually need: cash deposits at a branch or Post Office, integrated invoicing, multi-currency, or the lowest possible monthly fee. The table below sketches the kind of UK-relevant options a small business would realistically shortlist. Always check current pricing on each provider’s own site, as tiers change.
| Provider | Best known for | Typical monthly cost |
|---|---|---|
| Starling Bank | Full UK banking licence, app-first, physical cheque and cash handling | Free core account |
| Tide | Fast onboarding, invoicing and expense tools for sole traders and small firms | Free and paid tiers |
| ANNA Money | Admin help, tax pots and bundled extras (it has partnered on business insurance inside everyday admin) | Free and paid tiers |
| Cashplus Bank | Longer-established UK challenger, strong on acceptance for new businesses | Low monthly fee |
| WorldFirst | Multi-currency accounts for importers, exporters and online sellers | Check site |
| Metro Bank | Branch banking and growing SME lending | Free and paid tiers |
Two of these are worth a second look if you have not considered them. Cashplus Bank is a long-standing British provider that often approves newer businesses that struggle elsewhere, and WorldFirst focuses on holding and converting foreign currencies for firms that buy or sell abroad. Metro Bank, meanwhile, has been actively growing its small business lending, which matters if you want banking and borrowing in one place. If you are a woman-led business, it is also worth knowing that Nationwide has become the sole banking partner for the Rise to Scale programme.
Closing an account when you are closing the company
If the business itself is ending, sequence matters. Settle final wages, VAT and Corporation Tax, and let your accountant confirm nothing else is due before you empty the account. If you run payroll, make sure your final Real Time Information submissions are done; our guide to the best payroll software for UK small businesses can help you tie off that side cleanly.
For a limited company being struck off, remember that any money left in the account when the company is dissolved can become bona vacantia, meaning it passes to the Crown. Get funds out and distributed properly before you apply to Companies House to strike the company off. When in doubt, take advice from your accountant.
Frequently asked questions
Can I close a business bank account online?
Often yes, especially with app-based providers where you can request closure in the app or by secure message. Some high street banks still want a signed instruction or a branch visit, so check your bank’s process before you assume it is instant.
Do I have to tell HMRC when I close a business account?
There is no separate form to tell HMRC you have closed one account and opened another. But if you pay tax by direct debit from the old account, you must set that up again on the new one, or HMRC will not collect the payment. Keep records tidy, particularly with the Self Assessment changes that ACCA has warned sole traders about.
How long should I keep old bank statements after closing?
Keep business financial records for at least six years. For a limited company, that runs from the end of the accounting period they relate to. Download and store everything before the account closes, because retrieval afterwards can be slow or chargeable.
Will closing a business account hurt my credit?
Simply closing an account in good standing does not damage your business credit. What can cause problems is closing an account with an unpaid overdraft, unsettled fees or a linked loan still outstanding, so clear those first.
What happens to direct debits when I close the account?
They will fail once the account is shut. Move every direct debit and standing order to the new account first, then confirm each one has collected successfully at least once before you close the old account.
What to do next
- List every payment in and out of the account, then open and test your replacement account before closing anything.
- Download six years of statements and any documents your accountant needs, and store them safely.
- Clear the balance to nil, move currency balances at the best rate you can find, and request written confirmation of closure.
- If you are winding the company down, take advice before you strike it off so no money is trapped as bona vacantia.
