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Business banking in the UK has traditionally been expensive and with little competition between the high street banks.

But the market has become slightly more competitive in recent years, although in a bizarre ruling in 2007, the Competition Commission lifted the price controls it imposed in 2003 on the UK's four largest banks with regard to their provision of banking services to small businesses enterprises (SMEs).

The move, which was widely regarded as a retrograde step, allows banks to pay levels of interest below those set by the Commission in 2003.

Between 2003 and August 2007, the high street banks, which control 85 per cent of small business accounts, were obliged to pay a minimum of base rate, less 2.5 per cent, on business bank accounts.

These price controls were introduced in 2003 to improve transparency and to make switching business bank accounts easier for SMEs.

But in August 2007, the Competition Commission announced that price controls could be lifted because new entrants to the market, had increased competition and had made it easier for small businesses to change bank accounts.

Despite the lifting of price controls, banks will remain obliged to publicise any changes in their charges and will not be allowed to make the supply of SME banking services conditional on the customer buying other services, such as loans or personal current accounts.

Business current accounts are designed to cater for individuals or companies running a business, club, charity or other organisation.

The type of account and service you can obtain may depend on your company’s profit and turnover. But most banks will provide a cheque book, cash card, overdraft facilities and pay interest on credit balances.

The crucial features to watch out for are the cost of account transactions such as depositing cheques, writing cheques and the cost of authorised and unauthorised overdrafts.

Some providers offer free or reduced banking if you agree to certain constraints on account usage, such as only writing a certain number of cheques each month.

If you are switching account or you are a new customer, you may be offered an introductory period of  free banking, but check that the account terms will remain competitive thereafter.