Does Barclays have the right to impose a paid business account for a sole trader?

gilbutre

Hi everyone,

Someone at Barclays told me that I can't use a second personal account for business purposes, and that if Barclays detects that this second personal account of mine is of such purposes it will close all my accounts.

Many people say that sole traders can use personal bank account, so why does Barclays say they can't?

opinions4u

Yes, they have.

Does Barclays have the right to impose a paid business account for a sole trader?

innovate

Most current account T&Cs I have seen state that the account must be for personal, not business, use. Banks can decide what products they offer, and with what T&Cs. Of course they must stay within the law and within their licence, but it doesn't appear they are contravening either by insisting current accounts are for personal use only.

pmduk

gilbutre wrote: »

Many people say that sole traders can use personal bank account, so why does Barclays say they can't?

I suggest the people saying that are 'winging it' hoping their business use of their account doesn't get spotted. You must make your own judgement as to whether you wish to take that risk. Personally, I wouldn't.

gilbutre

Ok, thanks people.

Prothet_of_Doom

On a related point, don't have your business bank account at the same bank as your personal account

InsideInsurance

gilbutre wrote: »

Someone at Barclays told me that I can't use a second personal account for business purposes, and that if Barclays detects that this second personal account of mine is of such purposes it will close all my accounts.

Many people say that sole traders can use personal bank account, so why does Barclays say they can't?

No, Barclays cannot impose a paid business account for a sole trader

They can however state that you cannot use one of their personal accounts for the purposes of business and obviously if you breach this term of their contract, that you agreed to, they can take a suitable approach for the breach of contract.

That doesnt mean they force you to take a paid business account with them or somewhere else. You are free to try and get a free business account somewhere else or try and find a provider that will allow sole trader activity through a personal account.

Presently only Metro offer free banking that I know of for businesses and then there are certain terms to meet to get it for free.

gilbutre

@InsideInsurance: Unfortunately Metro Bank is in London only and I live in Birmingham. I'm told Santander also offers business accounts for free (except cash deposit which isn't free on these accounts)

@Prothet of Doom: why not have my business bank account at the same bank as my personal account?

opinions4u

gilbutre wrote: »

@Prothet of Doom: why not have my business bank account at the same bank as my personal account?

Google "right of set off".

JuicyJesus

opinions4u wrote: »

Google "right of set off".

It should be mentioned that should you ever need lending, having personal accounts at the same bank you hold your business accounts can assist, or at the very least make things less of a hassle, since they will have information on how you run your personal accounts day to day. It can also save traipsing from bank to bank to do things, on a more mundane level.

It's a risk you have to weigh up. Personally I wouldn't worry too much about right of set-off (if I owe the bank money in a personal capacity I owe them money regardless of which account it's on), but again, that's a consideration that's up to you.