UK Banking for EU Freelancers

Setting up a bank account in the UK can be a hassle, especially if you just arrived and want to go freelance. But thanks to London’s thriving fintech scene, there are a number of services that can help you get up and running in no time.

Philip Mueller
Feb 12, 2018 · 4 min read

The following list is just a personal selection, and covers by no means all options. Use it as a starting point and do your own research. I’m not affiliated with any of the companies and this is not financial advice.

Personal bank accounts

Probably London’s most beloved fintech start-up, Monzo is everywhere and easily recognisable by its bright orange cards. It’s free and offers a fast, painless sign-up through its mobile app. Monzo’s key features revolve around budgeting, with instant notifications whenever you use the card and monthly spending targets you can set.

Monzo recently obtained its banking license, so you get a sort code and an account number, a Mastercard debit card, you can set up standing orders and your money is protected up to £85,000 by the FSCS. At the moment, there’s a waiting list and it takes around 2 weeks to receive your card.

✅ Fast and easy online setup
✅ Free
✅ Easy budgeting
✅ Fully licensed bank
🔸 Free ATM withdrawals abroad of up to £200/month, 3% charge thereafter
❌ 〜2 weeks waiting list

Starling offers a similar set of features like Monzo. It’s a fully licensed, “mobile-only” bank giving you a dedicated mobile app, a debit Mastercard, UK account details and deposit protection up to £85,000. And it adds some nice features on top: most importantly, in my opinion, Starling charges zero fees when you pay with your card abroad. Starling uses Mastercard’s exchange rates (so it’s not hiding fees in the exchange rate). You also receive a bit of interest on your credit balances and you can apply for an overdraft.

Another interesting thing is that while the world of banks and payment providers can be highly fractured, Starling takes a more inclusive approach. The company sees itself as part of a financial ecosystem and currently builds a “Marketplace”, which lets other financial services — such as pensions, savings, travel insurance and mortgage brokerage — integrate with the Starling app through a comprehensive API.

✅ Fast and easy online setup
✅ Free
✅ Easy budgeting
✅ Fully licensed bank
✅ Zero fees abroad

Business accounts

Transferwise Borderless Account
Transferwise is actually a service that provides fast, low-cost international money transfers. It’s cheaper than regular bank transfers because money never actually crosses borders.

Essentially, if you send money from the UK to, say, France, you deposit your funds in Transferwise’s UK account, and it gets paid out from the company’s French account. You can learn more about how it works here. Because of its competitive rates, Transferwise has become quite popular in the last couple of years.

Recently, they introduced a very interesting business banking concept. The Borderless Account lets you hold money in up to 28 different currencies and gives you local bank details for USD, GBP, Euro and Australian Dollars. This is especially interesting if you work a lot with clients from different countries. They can pay you like a local and you don’t have to pay fees for receiving money from abroad.

Transferwise also just introduced a debit Mastercard, but for now it only works with personal Borderless accounts. That being said, a business account without a card might not helpful in the long run, but if you’re about to get your first gig and you quickly need a business bank account, this could be it.

Something to note is that Transferwise is not a bank. It’s an Electronic Money Institution authorised UK Financial Conduct Authority. Funds are held in a ring-fenced Barclays account, which means two things: 1) Barclays can’t use your money for any risky parts of its business, such as investment banking, and 2) should Transferwise go out of business, your money is still kept in the Barclays account. However, your funds are not protected by the FSCS.

✅ Fast and easy online setup
✅ Free
✅ Hold money in 28 different currencies
✅ Get local bank details for USD, GBP, EUR and AUD
❌ No debit/credit card (as of writing)*

Another interesting banking solution comes from Coconut, which launched on 31 January 2018. It’s specifically aimed at freelancers. Coconut offers a UK sort code and account number, direct debits and a debit Mastercard. Like Transferwise, it’s not a real bank (yet — this might have changed by the time you read this) and your money is kept in a ring-fenced Barclays account.

Coconut’s killer feature, in my opinion, is that it calculates a running tally of tax owed. So while you’re earning money, you always know how much you have to put aside for the tax man. The Coconut app also keeps track of your expenses and reminds you to send invoices. While I haven’t tried it myself, it sounds like a solution that takes away a lot of the headache that comes with filing tax returns.

✅ Sort code, account number, Mastercard debit card
✅ Keeps a running tally of the tax you owe
✅ Tracks and categorises expenses
🔸 Currently in beta
🔸 The beta is free, but only works for sole traders
🔸 If you’re a limited company, Coconuts charges £4.95/month (coming soon)

At the time of writing, Starling is working on a business account, but it’s not ready yet. Keep an eye out for it. You can get early access here.

❌ Not released yet (as of writing)*

These are, in my opinion, some of London’s most exciting banking start-ups. But there are tons more out there that might work better for you. So: do your own research.

*I’m including this because by them time you read this article, it might well be available.

Philip Mueller

Written by

Digital Copywriter | | @PhilipM83

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