Best Banking App for Self-Employed UK: 4 Free MTD Picks
The best banking app for self-employed UK workers in 2026, with Mettle, Starling, Monzo Lite and Tide compared on fees, tax pots and Making Tax Digital.
The best banking app for self-employed UK workers in 2026 is the one that keeps your business money separate, sets tax aside before you spend it, and files quarterly updates to HMRC without a second subscription. Making Tax Digital for Income Tax went live on 6 April 2026, so the app you pick now has a job it did not have two years ago: it has to keep digital records HMRC will accept.
Four accounts do that for nothing a month. This page compares them on the things that actually cost freelancers and side hustlers money, then covers the tax rules you need to know before you open anything.
The short answer
- Mettle if you want free banking plus proper accounting software included. NatWest owns it, and FreeAgent comes with the account.
- Starling if you want tax filing built into the banking app itself, with no third-party login.
- Monzo Business Lite if you already bank with Monzo personally and want one app for both.
- Tide if you are testing a side hustle and make only a handful of payments a month.
Mettle: free banking with FreeAgent thrown in
Mettle is NatWest’s app-only business account. There is no monthly fee, and the headline draw is that FreeAgent accounting software is included, which Mettle values at over £150 a year. FreeAgent is HMRC-recognised for Making Tax Digital, so between the two you have a complete records-and-filing setup at no cost.
The catch is small but real: you need at least one transaction a month on the Mettle account to keep FreeAgent free. Let the account go quiet and the software reverts to its normal price.
Mettle takes sole traders and limited companies with up to two owners, though only one owner can access the account. There are no cash deposits and no joint accounts, so if you take notes at markets or events, look elsewhere. Deposits sit with NatWest and are FSCS protected.
Starling: tax filing inside the banking app
Starling’s business account has no monthly fee and no charges on UK payments in or out. In March 2026 it replaced its old Business Toolkit with Starling Accounting, and the entry tier, Accounting Essentials, is free. It includes Starling’s own Making Tax Digital for Income Tax tool, which submits quarterly updates to HMRC from inside the banking app rather than through separate software.
That matters more than it sounds. Every other free route to MTD compliance means running a bank account and an accounting package side by side and hoping the feed between them behaves. Starling collapses the two.
If you are VAT registered, Accounting Plus adds VAT record keeping and VAT submissions for £7 a month. Starling has said that price holds until April 2027 and then rises to £14 a month, so budget for the step up rather than being surprised by it.
Spaces, Starling’s sub-account feature, is the other reason freelancers stay: park a percentage of every invoice in a tax Space and the January bill stops being a shock. Our Starling Bank review covers the personal side of the app.
Monzo Business Lite: free, and it lives next to your personal account
Monzo Business comes in three tiers. Lite is £0 a month and covers the essentials: a business current account, cheques, cash and contactless, and FSCS protection up to £120,000. Pro is £9 a month and adds the feature most self-employed people actually want, which is automatically setting aside a percentage of every payment that lands for tax. Team starts at £25 a month and adds expense cards and multi-user access.
Only sole traders and limited company directors in the UK can apply. The real argument for Monzo is friction: if your personal money already lives there, switching between the two accounts is one tap, and you are far more likely to keep the split clean. If you are weighing Monzo against Starling generally, we compare them in Monzo vs Starling.
Be honest with yourself about the £9. If you invoice twice a month, a tax Space on a free account does the same job by hand.
Tide: cheapest for a low-volume side hustle
Tide’s Free plan costs nothing a month and includes invoicing, expense categorisation and cash deposits. It allows five qualifying bank transfers a month, in or out; beyond that, standard UK transfers cost 20p each. Paid tiers run from Smart at £12.49 a month up to Max at £69.99.
Do the arithmetic before you commit. A side hustle with two or three payments a month pays nothing. A freelancer taking twenty client payments and paying six suppliers is buying transfers one at a time, and Mettle or Starling would be free at any volume.
One structural point worth knowing: Tide is an e-money provider rather than a bank. Money in the e-money account is safeguarded under the e-money rules through PrePay Technologies rather than covered by the FSCS, though eligible deposits held with ClearBank are FSCS protected up to £120,000. If FSCS cover is your deciding factor, Mettle, Starling and Monzo are all straightforwardly banks. We go into this in more depth in are digital banks safe.
What about ANNA?
ANNA’s Free plan is worth a look if you want tax filing bundled: MTD for Income Tax is included on every tier, and paid plans run from Grow at £12.90 plus VAT. Its Auto Accountant service is free for four months and then £29 a month, which is where the real cost sits.
The main ANNA account is safeguarded under the Electronic Money Regulations 2011 and is not FSCS protected. Its separate savings product, provided by Griffin Bank, is FSCS protected up to £120,000.
Making Tax Digital: what changed in April 2026
This is the rule that reshaped the market. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC through recognised software, plus a final declaration at the end of the year. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
Qualifying income is gross self-employment and property income, before expenses. That trips people up: you can be well under £50,000 in profit and still over the threshold on turnover. HMRC’s own check on whether and when MTD applies to you is the place to confirm your date.
If your income is close to £20,000, assume you are in by 2028 and pick an app now that files for free, rather than paying for software twice.
Side hustle tax: the £1,000 line
If your gross trading income for the tax year is £1,000 or less, the trading allowance normally covers it and you do not need to tell HMRC. Note that it is gross income, before costs, so £1,400 of Vinted sales with £600 of postage is over the line even though the profit is not.
Once you pass £1,000, register as self-employed by 5 October after the end of that tax year, then file and pay by 31 January. A higher £3,000 reporting threshold has been announced for later this decade, but it is not law yet, so the £1,000 figure is the one to work to. HMRC’s guidance on the trading allowance sets out the detail.
Choosing between them
Ask three questions in this order.
- Do you handle cash? If yes, Mettle is out and Tide or a high-street account goes back on the list.
- Will you cross the MTD threshold? If yes, weigh Starling’s built-in filing against Mettle plus FreeAgent. Both cost nothing; Starling is fewer moving parts, FreeAgent is more capable once your books get complicated.
- How many payments a month? Above roughly five, Tide’s free plan stops being free and the flat-fee-free accounts win.
Whichever you pick, open a separate account rather than running business income through your personal one. It costs nothing and it turns your January tax return from an archaeology project into an export. If your income arrives unevenly, our guide to budgeting on irregular income pairs well with a tax pot.
Frequently asked questions
What is the best banking app for self-employed UK workers? Mettle and Starling are the strongest free options. Mettle includes FreeAgent accounting software; Starling includes a free Making Tax Digital for Income Tax tool inside the banking app. Both charge nothing a month and neither charges for UK payments.
Do I legally need a business bank account if I am self-employed? No. Sole traders can legally use a personal account, though many personal accounts’ terms forbid business use. A separate account is not a legal requirement but it makes record keeping and MTD reporting far easier, and it is free.
Which self-employed banking apps work with Making Tax Digital? Starling files quarterly updates directly through its free Accounting Essentials tier. Mettle covers it through the included FreeAgent subscription. ANNA includes MTD for Income Tax on all plans, including its free one. Monzo Business also supports MTD filing.
How much do I need to earn before Making Tax Digital applies? Qualifying income over £50,000 brought you in from 6 April 2026. Over £30,000 applies from April 2027 and over £20,000 from April 2028. Qualifying income is gross turnover from self-employment and property, not profit.
Can I open a business account for a side hustle I do alongside a job? Yes. Mettle, Starling, Monzo and Tide all accept sole traders, and having a job elsewhere does not affect eligibility. You will need to be UK resident and pass the usual identity checks.
Is Tide protected by the FSCS? Not the e-money account. Money held there is safeguarded under the Electronic Money Regulations rather than FSCS protected. Eligible deposits held with ClearBank are covered up to £120,000. Mettle, Starling and Monzo are banks, so balances are FSCS protected.
