Monzo business bank account review

16 min Read Published: 24 Apr 2020

What is Monzo business?

Monzo business bank account reviewMonzo has built a popular app for personal users to manage their current account, set budgets and monitor their spending easily from a smartphone and now the fintech firm has entered the business banking space.

Its business bank accounts are open to UK-based sole traders or limited companies that only pay tax in the UK.

Limited companies must be active on Companies House with an active company director and at least one person of significant control. This aims to eliminate complicated structures where a business could be owned by several other companies. Limited companies must also make money mostly from selling goods or services, not from interest or investment income.

The app doesn’t currently support other business structures such as partnerships, charities, limited companies by guarantee, public limited companies, trusts or funds. There is also a long list of industries that Monzo won’t provide accounts for such as construction, consumer credit, dating or escort services and business involved with gambling and weapons. View the full list here.

It may also not be suitable if you use lots of cash as Monzo only lets you pay in between £5 and £300 at a time and only up to £1,000 every six months, lowered to £500 for those aged 16 or 17.

How does Monzo business work?

There are no appointments necessary to get a Monzo business account. You can sign up straight away by downloading the app however, you'll need to be a current account user in order to apply. Read our review of Monzo’s current account. If you are already a Monzo user, you can simply click a button to apply for a business account through the app.

Signing up is a quick process compared with having to make an appointment in a bank branch and dragging along a load of paperwork. New users will need to verify their email and phone number and enter their personal details. There are also anti-money laundering and credit reference checks so have some ID ready to upload and also prepare for a selfie to confirm who you are.

Once your account is approved, you can apply for a business account and will need to enter details including the sector you work in, the type of business you run and how you receive your income, such as in cash or through bank transfers.

If your application is approved, you can start using the account straight away and users can also switch to Monzo through the Current Account Switch Service.

Monzo business banking features

Business debit card

Choose between a pebble grey or slate grey finish MasterCard debit card.

Tax pots

Similar to the savings pots in its personal current accounts, Monzo provides tax pots so you can remember to put money aside for the all-important tax bills. You choose a percentage to set aside automatically each month but you can also move money at any time.

Multi-user access

This is only available on its paid-for Pro version, but limited companies can add up to two other people to access and manage the account. All three users will be able to pay people, see incoming and outgoing payments and edit account information.

Accountancy tools

Integrate software such as Xero, FreeAgent and QuickBooks so you or your accountant can easily keep track of financial information to help with balancing the books. This is only available on the Pro version

Notifications

Receive messages when a payment has been made. This saves time having to check if an invoice has been paid.

Mobile and web access

Once set up, your account can be accessed from your phone or computer. The web app lets you pay people, export statements and see your transaction history, while you can do this and other important tasks through the mobile app such as setting alerts, sending invoices and uploading receipts.

Standard Monzo features

With a Monzo business account you get the additional Monzo personal account features such as 24/7 customer support, fee-free spending abroad and free instant UK bank transfers.

How much does Monzo business cost?

Monzo offers two business account options and we breakdown the features of each account in the table below:

Monzo Lite business account (Free) Monzo Pro business account      (£5 per month)
Monzo current account benefits
Business debit card
Mobile and Web access
Tax pots
Integrated accounting
Multi-user access
Invoicing
Exclusive business offers

 

The Monzo business account is free if you decide to use its basic Lite version, but you don’t get the tax pots, invoicing or integrated accountancy features. Alternatively, for £5 a month, Monzo’s Business Pro plan gives you everything including the option of six months free use of accountancy software Xero. Both options include the Monzo personal account features such as free bank transfers, overseas spending, savings pots, spending alerts and scheduled payments.

The bank charges £1 to pay in cash at PayPoint. There are no charges for ATM withdrawals inside the European Economic Area (EEA), subject to a £400 daily limit. You can take out £200 cash for free every 30 days outside the EEA and there is a charge of 3% after that. For international transfers, you will need to pay a TransferWise fee.

Is Monzo’s business account safe?

Monzo is fully regulated by the Financial Conduct Authority (FCA) so must follow rules on separating client money, being clear about charges and treating customers fairly. Up to £85,000 of your money is protected by the Financial Services Compensation Scheme if Monzo becomes insolvent and you also have a right to complain to the Financial Ombudsman Service.

Monzo vs alternative business accounts

Monzo business vs Starling business

Below we compare the features of the Monzo business bank account vs the features on offer from Starling bank's business account:

Monzo business Starling business
Pricing Free (Lite version)

£5 per month (Pro version)

No monthly fees
£7 a month Business Toolkit version coming soon
Spending Free in UK and abroad Free in UK and abroad
Withdrawals Free (max £400 daily) Free (max £300 daily)
Deposits £1 to pay deposits at any PayPoint £3 charge up to £1,000 and 0.3 per cent above that at the Post Office
Features Tax pots

Spending alerts

Accountancy tools

Send invoices

Special offers

Flexible overdraft

Access to Starling Bank Marketplace

Accountancy tools

Send invoices

Receipt capture

Spending alerts

Record VAT

 

Starling Bank offers much of the same service as Monzo's paid-for 'Pro' option, but does so for free. Monzo Bank’s tax pots feature in its Pro version is useful and unique, although Starling Bank is working on a similar Business Toolkit that will cost £7 a month and offers bookkeeping and VAT management. Starling may work out more expensive when it comes to depositing lots of cash, at £3 each time rather than the £1 you pay with Monzo.

Monzo business vs Tide business

Below we compare the features of the Monzo business bank account vs the features on offer from Tide's business account:

Monzo business Tide business
Pricing Free (Lite version)

£5 per month (Pro version)

Free Standard Tide account

£9.99 per month plus VAT for Tide Plus

£49.99 per month for Tide Premium

Spending Free in UK and abroad Free in UK and abroad but bank transfers cost 20p
Withdrawals Free (max £400 daily) £1 (max £500)
Deposits £1 to pay deposits at any PayPoint £1
Features Tax pots

Spending alerts

Accountancy tools

Send invoices

Special offers

Link with accountancy software

In-app invoicing

Legal helpline with Plus service

 

Monzo offers more features and its paid-for 'Pro' version is cheaper than Tide’s offering. Tide can also be pricey if you are making a lot of transfers at 20p a time. Tide does offer a legal helpline with its Plus service, which could come in handy if you need support drafting documents or work in a particularly litigious sector.

Monzo business vs Revolut for business

Below we compare the features of the Monzo business bank account vs the features on offer from Revolut for business:

Monzo business Revolut business
Pricing Free (Lite version)

£5 per month (Pro version)

Free account

£7 per month professional account

Spending Free in UK and abroad Unlimited payments to other Revolut accounts

20 free local transfers and five free international transfers on paid-for plan

Withdrawals Free (max £400 daily) Free (£3,000 max per day)
Deposits £1 to pay deposits at any PayPoint Not available
Features Tax pots

Spending alerts

Accountancy tools

Send invoices

Special offers

Hold and receive multiple currencies

Schedule and approve payments
Open to UK residents and those in the European Economic Area

 

Monzo offers more extras but Revolut is useful for those holding multiple currencies or not solely UK-based, so could be better for freelancers or companies operating internationally.

Monzo business vs high street business bank accounts

Monzo business Santander business Lloyds business HSBC business NatWest business
Pricing Free (Lite version)

£5 per month (Pro version)

Discounted monthly fee of £5 for start-ups for 18 months and switchers for 12 months (£12.50 standard monthly fee) £6.50 per month £6.50 per moth £5 minimum monthly charge
Free banking Free in UK and abroad No charge for ATM or over-the-counter deposits 18 months’ free day-to-day business banking for new businesses Free banking for 18 months

Free standard transactions for 30 months

18-months transaction fee-free banking
Extras Tax pots

Spending alerts

Accountancy tools

Send invoices

Special offers

Up to £300 cashback per year Business guides Accountancy integration
Brexit clinics
Dedicated startup package

Complimentary access to FreeAgent accountancy software

Daily ATM withdrawals Free (max £400 daily) Free (£500 per day) Free (£700 per day) Free (£300 per day) Free (£1,500)

 

Opening a business account has traditionally been a long-winded process that involves arranging a branch appointment during opening hours and bringing along paperwork to be assessed by the local bank manager.

Banking apps such as Monzo take away a lot of the time and hassle involved as you can apply online at any time of day and get a quick decision rather than making you wait for weeks as some high street lenders do.

Monzo offers a lot more than mainstream high street banks with lower monthly fees and far more fintech-focused extras to actually help you manage your business. There are downsides though as you have to be technologically savvy enough to manage most of your business finances through an app or on a computer. There is no bank manager you can go and see with any queries, instead you have to phone a contact centre. It may also not be best for those getting paid in lots of cash as there are limits on how much you can deposit each time.

Conclusion

Pros

  • Quick setup - Download the app and sign up for a personal and business account within minutes.
  • Fee-free spending at home and abroad - No charges wherever you spend your money.
  • Accountancy integration - Send invoices, store receipts and get everything organised for HMRC.
  • Save for tax - Make sure you are saving enough for tax bills such as corporation tax.
  • Spending alerts - Keep track of money coming in and out without having to constantly login to your account.

Cons

  • Deposit limits - You can only pay in up to £300 in one go and up to £1,000 every six months, lowered to £500 for those aged 16 or 17.
  • App only - There is no branch you can drop into with queries and everything has to be managed from your phone or the desktop app.
  • Eligibility restrictions - Monzo’s accounts are mainly aimed at UK-based businesses and focused on sole traders and limited companies (and there are some sectors that are excluded)

 

Monzo’s business bank account is a great way for UK-based entrepreneurs, whether sole traders or limited companies, to manage their firm’s finances. Information can be accessed quickly and efficiently on the move and so is a good option for businesses that receive most of their revenue electronically and who are unlikely to need to speak to a bank manager.

 

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.

Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.