How to Switch Business Bank Accounts in the UK Without Disruption

Switching your business bank account in the UK doesn’t have to be a nightmare. Many small business owners delay it because they fear missed payments, broken direct debits, or losing access to cash during the move. But with the right steps, you can switch smoothly-even if you’re juggling payroll, supplier invoices, and client payments. The UK’s Current Account Switching Service (CASS) makes this easier than ever, and most banks now offer free, guided transitions. Here’s how to do it without missing a beat.

Start by comparing your options

Not all business bank accounts are the same. Some charge monthly fees but offer free transactions. Others have no monthly fee but hit you with per-transaction costs. Some give you free bookkeeping software. Others connect directly to Xero or QuickBooks. If you’re paying £20 a month for a basic account and using only 10 transactions, you’re overpaying. If you’re on a free account but constantly hitting overdraft limits, you’re risking penalties.

Look at what you actually use. Do you make more than 50 payments a month? Then prioritize low per-transaction fees. Do you need international transfers? Check exchange rates and fees for EUR or USD. If you take card payments, see if the bank offers integrated payment processing. Revolut Business, Tide, and Starling Bank are popular alternatives to traditional high-street banks like Barclays or HSBC. They often have better digital tools and lower fees. But if you need branch access for cash deposits or in-person advice, a high-street bank might still be worth it.

Open the new account first

Never close your old account before the new one is fully active. That’s the biggest mistake people make. Open the new account with your chosen provider. You’ll need your business registration number, proof of address, and possibly your business plan or recent bank statements. Some digital banks can set up your account in under 24 hours. Others take a few days. Don’t rush this part.

Once the new account is open, don’t just sit on it. Start moving money in. Deposit your next client payment. Pay a small supplier. Test the system. Make sure you can log in, send payments, and view statements. If you’re using online banking tools like Faster Payments or Bacs, test those too. This isn’t just about access-it’s about confidence. You want to know your new account works before you shut down the old one.

Use the Current Account Switching Service (CASS)

The UK’s Current Account Switching Service is free, automatic, and legally guaranteed. If you use it, your old bank transfers all your direct debits and standing orders to the new account within seven working days. The service also refunds any fees or charges caused by failed payments during the switch. You don’t have to contact each supplier or client individually.

To use CASS, simply ask your new bank to start the switch. They’ll handle everything. You’ll get a switch date-usually 7 to 10 days from when you apply. On that date, your old account stops accepting incoming payments, and all future payments go to your new account. Your old bank will also notify your direct debit recipients and standing order payees on your behalf. No paperwork from you needed.

Some banks, like Monzo and NatWest, even offer a guarantee: if a payment fails because of their error, they’ll cover the cost. That’s peace of mind you can’t buy.

Update your direct debits and standing orders

Even with CASS, you should double-check. CASS covers most payments, but not all. For example, if you pay HMRC through a direct debit, it’s covered. But if you use a third-party payroll provider like Xero Payroll or QuickBooks Payroll, you may need to update the payment details manually. Same with insurance premiums, software subscriptions, or utility bills paid through non-bank platforms.

Make a list of every recurring payment. Include:

• HMRC tax payments
• Payroll providers
• Insurance premiums
• Software subscriptions (e.g., Xero, Zoho, Microsoft 365)
• Utility bills
• Loan repayments
• Supplier payments via direct debit

Then go through each one. Log into the service, find the payment settings, and update the bank account number and sort code. Don’t assume CASS got it. Many businesses miss one or two and end up with late fees or service interruptions.

Notify your clients and suppliers

Your clients need to know where to send payments. If you invoice via email, update your invoice template with the new account details. If you use accounting software, update the payment details in your client portal. If you’re on platforms like PayPal or Stripe, make sure your linked bank account is updated there too.

For suppliers who pay you, send a simple email:

Hi [Name],
Just a quick heads-up-I’ve switched my business bank account. From [date], all payments should be sent to:
Account Name: [Your Business Name]
Sort Code: XXX-XXX-XX
Account Number: XXXXXXXX
Thanks for your help with this!

Don’t forget to update your website, LinkedIn profile, and any printed materials. Even if you think no one looks at them, someone might.

Keep the old account open for 30 days

After your switch date, don’t close the old account right away. Keep it open for at least 30 days. Why? Because some payments might still come in. A client might forget. A supplier might delay updating their records. HMRC might send a refund. A customer might pay by cheque.

During this time, check the old account weekly. If any payments land there, forward them to your new account. Most banks let you set up automatic transfers from the old to the new account during this window. Ask your old bank if they offer this. It’s a small step that saves hours of chasing down money.

Cancel the old account and get your final statement

After 30 days, close the old account. Request a final statement. Make sure there are no hidden fees or outstanding charges. If you had an overdraft, pay it off before closing. If you had a business credit card linked to the account, cancel it separately. Don’t assume it’s closed when the account is.

Once the account is closed, confirm in writing that there are no further liabilities. Keep a copy of the closure confirmation. You might need it for tax records or audits.

Update your accounting records

Your bookkeeping system needs to reflect the change. If you use QuickBooks, Xero, or Sage, go into your bank feed settings and disconnect the old account. Link the new one. Reconcile any transactions that moved during the switch. If you’ve been manually entering payments, update the bank account name in your ledger.

Also, update your business’s financial records. Your year-end accounts, VAT returns, and corporation tax filings must show the correct bank details. If you work with an accountant, give them the new account info. Even if they don’t manage payments, they need to know where your money flows.

Watch for hidden costs

Some banks offer “free” business accounts but charge for things you didn’t expect. ATM withdrawals. International transfers. Cash deposits. Paper statements. Even printing checks. Read the fine print before you sign up. A £0 monthly fee isn’t free if you pay £5 every time you deposit cash.

Also, check if your new bank charges for failed payments. If someone sends you money to the wrong account, will you be charged? If your account goes overdrawn by £1, will you pay £20? These fees can add up fast.

Stick to banks that clearly list all fees on their website. Avoid ones that bury them in a PDF you have to request.

What if something goes wrong?

Even with CASS, things can slip through. A payment fails. A supplier claims they never got the update. A client pays to the old account and you don’t notice until the money’s gone.

If that happens:

1. Check your old account first. The payment might still be there.
2. Contact the payer and ask them to resend to the new account.
3. If it’s a direct debit, contact the recipient and ask them to check their records.
4. If you’re out of pocket because of a bank error, claim under CASS. Banks are legally required to reimburse you within 20 working days.

Keep records of all communications. Emails, screenshots, reference numbers. If you need to escalate, you’ll need proof.

Final checklist before you switch

Before you hit ‘confirm’ on your switch:

• ✅ Compare 3 business accounts-fees, features, support
• ✅ Open the new account and test it
• ✅ Ask your new bank to start CASS
• ✅ List all direct debits and standing orders
• ✅ Update each one manually-even if CASS covers it
• ✅ Notify clients and suppliers with new details
• ✅ Keep the old account open for 30 days
• ✅ Update your accounting software
• ✅ Close the old account and get final statement
• ✅ Save all confirmation emails

Switching your business bank account isn’t glamorous. But done right, it can save you hundreds a year and give you better tools to run your business. The UK’s system is built to make this easy. You just need to be systematic. Don’t skip steps. Don’t assume it’ll be fine. Do the work now, and you’ll thank yourself in six months when you’re not chasing down a missed payroll payment.