Starling Bank

Starling is a fully licensed UK bank offering a free sole trader account with FSCS protection up to £120,000, free invoicing, receipt capture and a built-in Making Tax Digital tool.

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At a glance

Starling is a fully licensed UK bank, not an e-money institution, so eligible deposits carry FSCS protection up to £120,000. The sole trader account is free, with no monthly fee or UK payment charges, and includes free invoicing, receipt capture and a built-in, HMRC-recognised MTD for Income Tax tool.

Free

£120,000

FSCS protection limit

Sole Trader Account

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What is Starling Bank?

Starling Bank is a fully licensed, app-based UK bank, authorised by the Prudential Regulation Authority and regulated by the FCA and PRA. Unlike some challenger business accounts, Starling isn’t an e-money institution wrapped around a partner bank - it’s a bank in its own right, which means eligible deposits are protected by the Financial Services Compensation Scheme up to £120,000. It’s entirely app-based, with no physical branches, but offers 24/7 UK-based phone and chat support.

Key features

Free invoicing, with automatic payment matching
Automatic transaction categorisation (Spending Insights)
Receipt capture
Free, HMRC-recognised MTD for Income Tax tool for quarterly updates
Free bank feeds with Xero, QuickBooks and FreeAgent
Spaces, for ring-fencing tax money

Pricing

Starling’s sole trader account is free. One paid add-on is available if you need it.

Sole trader account - £0/month

Free accounting tools, included from day one:

No monthly fee, no charges for UK payments, transfers, Direct Debits or standing orders
Free invoicing, receipt capture and MTD for Income Tax tool
Cash deposits charged at £3 or 0.7% (whichever is higher), capped at £5,000/day and £20,000/year

Accounting Plus - £7/month until April 2027, then £14/month

For VAT-registered businesses, upgrade any time:

Everything in the free account, plus
VAT return submission direct to HMRC
Automated VAT calculations
No contract, cancel anytime

Who can open a Starling sole trader account?

You need to be a UK resident sole trader (not a partnership, LLP or limited company), aged 18 or over, trading in your own name rather than through a separate legal entity, and pass standard identity and credit checks. You can hold up to two sole trader accounts for two different businesses. A Unique Taxpayer Reference is requested if you’re already registered with HMRC, though you can still apply without one.

Pros and cons

Pros:

Genuinely free account, with FSCS protection up to £120,000
Free invoicing, receipt capture and transaction categorisation
Free MTD for Income Tax tool for quarterly updates
Free bank feeds with Xero, QuickBooks and FreeAgent
24/7 UK-based support, no branch visits needed

Cons:

No overdrafts or business loans for sole traders
App-only, with capped and charged cash deposits
VAT return submission needs the paid Accounting Plus add-on
MTD final declaration not yet live - listed as coming soon
USD sub-accounts closed to new applicants
Only available to sole traders trading in their own name - not partnerships, LLPs or limited companies

Who is Starling Bank best for?

Starling is one of the strongest free options for a UK sole trader who wants a proper licensed bank account with genuine FSCS protection, alongside free invoicing and a built-in MTD for Income Tax tool. The main gaps are no overdraft or lending for sole traders, and the fact that Starling’s own MTD tool doesn’t yet handle the year-end final declaration, so you may still need an accountant or separate software for that step. If those gaps don’t affect you, it’s a genuinely free, low-friction choice.

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Frequently asked questions

Is Starling Bank actually free for a sole trader account?

Yes, the sole trader account has no monthly fee and no charge for standard UK payments. You only pay for extras like VAT return submission (Accounting Plus, from £7 a month), a euro sub-account, or frequent cash deposits.

Is my money protected with Starling Bank?

Yes. Starling is a fully licensed UK bank, so eligible deposits are protected by the FSCS up to £120,000, the same statutory protection as any UK high street bank.

Can Starling submit my MTD for Income Tax updates to HMRC?

Yes, Starling’s free Accounting Essentials tool is HMRC-recognised and lets you submit quarterly updates directly. The end-of-year final declaration feature is still listed as coming soon, so you may need separate software or an accountant for that step for now.

Can I get an overdraft with a Starling sole trader account?

No. Starling’s overdrafts and business loans are only available to limited companies and LLPs, not sole traders.

Does Starling connect to accounting software like Xero or QuickBooks?

Yes, free bank feed integrations are available with Xero, QuickBooks and FreeAgent via Starling Marketplace.

Compare accounting software for sole traders

Starling Bank is one option among several worth comparing. Browse the full Business Banking directory to compare it against Tide, Monzo Business, Wise, Revolut Pro and Mettle.

Prices and offers correct at time of publication. Always check the website for current pricing and promotional terms before signing up.