Bank moving money without consent

dannymckee101

My Barclays business manager has moved money from my savings account to my current account to pay a direct debit to HMRC without permission from myself is he allowed to do this? some advice would be much appreciated.

JuicyJesus

Yes. They can use right of set-off. The Direct Debit being paid would cause you to owe them money, so the bank can use set-off to clear that debt.

dannymckee101

Many thanks for your reply
By taking this money out he has left me short of money to pay a more important corporation tax bill

exel1966

dannymckee101 wrote: »

My Barclays business manager has moved money from my savings account to my current account to pay a direct debit to HMRC without permission from myself is he allowed to do this? some advice would be much appreciated.

You would have given your permission when you signed on the dotted line to open the account. It's pretty standard for most banks and accounts.

It usually only occurs when there's a history of financial mismanagement.

opinions4u

Sounds like he has done you a favour to stop you being charged.

It doesn't have to be right of set off. It may be part of the relationship agreement.

Gromitt

dannymckee101 wrote: »

Many thanks for your reply
By taking this money out he has left me short of money to pay a more important corporation tax bill

Well, you'd still have to borrow the money from somewhere, as the HMRC are not going to be waiting around either.

Perhaps a discussion with your bank manager is in order?

coldhandoff

So you didn't have the money to pay your HMRC bill and your corporation tax? Shouldn't you be more worried about that rather than your BM looking out for you?

thenudeone

You signed a direct debit allowing HMRC to take money from your account.

You know how much they planned to take and when (which is one of the conditions for direct debit system).

This put you into an unarranged / unapproved overdraft position

The bank has used their right to offset your unauthorised overdraft against your savings.

Not sure there's much to complain about really. Sorry.

opinions4u

Section 4.1.4 and 5.1.3 of the FSA Handbook gives more information on Right of Set Off.

The requirement to consider other priority bills, subsistence allowances and notification of customers.

http://fsahandbook.info/FSA/html/handbook/BCOBS/4/1

Not sure where it fits in with small businesses, but it's a lot tougher for banks to use RIght of Set Off than it used to be.

heloid

From the OP's point of view they may have been aware of the situation but perhaps the penalty for not paying the HMRC bill could have been less..

Anyway OP, I think the only way around this is to give your bank manager very clear instructions on how your savings are handled in the future and hopefully they'll be able to comply. In this case they probably thought they were doing you a favour by avoiding a bank charge.

GlamGirlie

heloid wrote: »

Anyway OP, I think the only way around this is to give your bank manager very clear instructions on how your savings are handled in the future and hopefully they'll be able to comply. In this case they probably thought they were doing you a favour by avoiding a bank charge.

You can give any instructions you like but unless the savings are in a joint account, an ISA, or are ring-fenced because they are held as security for a facility, the bank can use them to set off against any debt held.

As for them 'doing you a favour', some bank managers don't have the authority to pay an account to excess and so their only options are transfer money if available, or if nothing is available, to bounce the item/s presented.

Furthermore, you will find it in your account T&Cs somewhere that cleared funds should be available in the account BEFORE items are presented for payment.