Business Bank Accounts with Debt Relief Order

GeorgiaMW

Hi all,
I'm starting up as a sole trader and need a business bank account. I had a Debt Relief Order completed last August, so I'd be looking to properly get started in August once the moratorium period is over.

Don't know if you know what the moratorium period is but in that time (1yr) I cannot apply for credit, act as a Director for a limited company among other things. So I wouldn't be looking for a LTD company account, just a ST one.

I don't know how easy it would be to get an account though. Any ideas? Next to impossible I'd imagine. Even though I don't want any credit facilities. If that is the case, could my husband apply for the account if he was a partner?

Thanks

Me

Brassedoff

GeorgiaMW wrote: »

Hi all,
I'm starting up as a sole trader and need a business bank account. I had a Debt Relief Order completed last August, so I'd be looking to properly get started in August once the moratorium period is over.

Don't know if you know what the moratorium period is but in that time (1yr) I cannot apply for credit, act as a Director for a limited company among other things. So I wouldn't be looking for a LTD company account, just a ST one.

I don't know how easy it would be to get an account though. Any ideas? Next to impossible I'd imagine. Even though I don't want any credit facilities. If that is the case, could my husband apply for the account if he was a partner?

Thanks

Me

From my experience of getting new accounts for a variety of people doing start ups, I would say you would have a lot of difficulty. To be honest, anyone with a MO would find getting new facilities would find it very hard for at least a year once out of the MO. You could get your partner to do it, but if caught acting as the controlling mind of the business, you could end up doing time.

The OR treats any breach of an MO really seriously in the past few years.

I had a client who went pop and managed to get themselves really blackballed. The only think I could get them was via APS Financial who do a debit card account, online payments etc.

One other word of caution, the Commissioners make ask for a substantial surety from you if you owed the HMRC a substantial sum on liquidation

GeorgiaMW

Sorry, not sure what you mean by "MO"? Debt Relief Orders basically wipe off debt if you literally have more outgoings than income (I did) but aren't bankruptcy.

If you mean the moratorium period then that ends in August and after that I'm allowed to do just about whatever I like. Of course it will remain on my file as bad credit for 6 years but beyond an inability to get credit, there's not much else it will prevent me doing.

Right now I cannot earn more than £50 disposable income and right now I cannot work anyway, I have a small child and I wouldn't earn enough to cover my childcare costs (no family in the area able to look after little one) and he's not yet 3 so gets no free childcare.

I thought this would be the perfect solution - become self-employed once out of the 1yr period and therefore I could work from home and look after him and when he hits 3 in April 2014, I can mix in a small part time job for the 20hrs a week he'd get free at nursery.

Oh and before you ask, I don't get ANY benefits other than child benefit. Luckily hubby earns enough to cover our bills and feed us but nothing else.

So are you telling me that I cannot even do this and there's no way of getting a business account? If my husband was the financial controlling mind of the business and I was just the front man, would that be ok? I'm a photographer you see so I could do the shoots and my husband could deal with the accounts if that would be legal? Or how about a joint business account? He sets it up, adds me later? I seem to have no issue with that - since being married he's added me to two of his accounts. It seems that when they credit check him, it's fine and then they don't check me when adding me. Odd but if it works...

I want to do this legitimately, I have no intention of defrauding anyone or trying to get out of paying tax but there seems to be very little help or advice. Crazy considering how many people these days must be in my exact situation! I even contacted CAB asking them if I could set up as a ST as all it says in the paperwork is that I cannot be a director of a limited company. The answer I got was basically just a cut and paste job straight from the paperwork, word for word. I took that at face value (what else could I do?) and assumed a ST would be ok!

GeorgiaMW

Another solution might be to upgrade my existing bank account that I don't use to a business one? Would they credit check me if I did that?

Brassedoff

GeorgiaMW wrote: »

Sorry, not sure what you mean by "MO"? Debt Relief Orders basically wipe off debt if you literally have more outgoings than income (I did) but aren't bankruptcy.

If you mean the moratorium period then that ends in August and after that I'm allowed to do just about whatever I like. Of course it will remain on my file as bad credit for 6 years but beyond an inability to get credit, there's not much else it will prevent me doing.

Right now I cannot earn more than £50 disposable income and right now I cannot work anyway, I have a small child and I wouldn't earn enough to cover my childcare costs (no family in the area able to look after little one) and he's not yet 3 so gets no free childcare.

I thought this would be the perfect solution - become self-employed once out of the 1yr period and therefore I could work from home and look after him and when he hits 3 in April 2014, I can mix in a small part time job for the 20hrs a week he'd get free at nursery.

Oh and before you ask, I don't get ANY benefits other than child benefit. Luckily hubby earns enough to cover our bills and feed us but nothing else.

So are you telling me that I cannot even do this and there's no way of getting a business account? If my husband was the financial controlling mind of the business and I was just the front man, would that be ok? I'm a photographer you see so I could do the shoots and my husband could deal with the accounts if that would be legal? Or how about a joint business account? He sets it up, adds me later? I seem to have no issue with that - since being married he's added me to two of his accounts. It seems that when they credit check him, it's fine and then they don't check me when adding me. Odd but if it works...

I want to do this legitimately, I have no intention of defrauding anyone or trying to get out of paying tax but there seems to be very little help or advice. Crazy considering how many people these days must be in my exact situation! I even contacted CAB asking them if I could set up as a ST as all it says in the paperwork is that I cannot be a director of a limited company. The answer I got was basically just a cut and paste job straight from the paperwork, word for word. I took that at face value (what else could I do?) and assumed a ST would be ok!

OK, I got a few bits from your post misunderstood. If you are a photographer, I assume you will want to work freelance? If so, why not either go for a simple Limited of LLP company to protect your assets?

That way you work as a freelancer (providing you have three clients over a four month period) or you take commissions?

In your shoes that is what I would do, or if I were advising you and knew all your details it is what I would more than likely plumb for.

As for bank accounts. Try two banks only, then there are guaranteed accounts that are genuine with debit/credit card, online accounts, PDA for card payments etc.

It depends on what you intend to do.

As for taking any benefit, its nothing to do with me if you were. I was looking to help you with the business you intend setting up.

I assume you were self employed before and operated as a sole trader, hence your current issues? If so, that is the exact reason why I hardly ever advise a client to be a sole trader, especially a photographer. Its in the top 20 of business type failures.

If I can help you further (if you want my help that is), just ask.

leveller2911

You don't need a Business account.You can run the business from a current account. I've been a sole trader/partnership for 25 yrs and I've never had any trouble running from a current account.

Business accounts tend to have a free set up period then when thats over the charges kick in so I wouldn't bother.

I was told by HSBC that if I didn't go over to a business account they could be in trouble with the FSA for allowing people to run businesses from current accounts. I insisted I wanted to keep my current account and have done for years...