Switching a business account to a current account

1967boy

Hi have a small buy to let portfolio which I run for ten years through a HSBC business account and they have started to charge for the account around £7 per month. I do not require a business account just an account for the properties and I was thinking about getting a current account with interest added as a bonus . I have around £1200 per month paid into the account and after the relevant mortgages are deducted there is around £425 left each month.
As there are switching services this should be easy however can anyone see any pitfalls or problems ?


All thoughts are welcome !


Cheers

colsten

As your BTL is a business, however small, you need to keep it separate from your private accounts. Banks don't like people using personal accounts for business - in fact, it is against the T&Cs, and every so often, somebody here reports they had their personal current account closed at short or no notice. Often it is because they used their personal account for business.

It is most likely also an advantage for your tax returns if you have your business separate from your personal account. Presumably business bank account charges count as expenses that can be offset against profit, so your real cost should be minimal?

If you want to have a business account that costs nothing, check the Coop. They do have one but you need to be a member of an industry association.

[STRIKE]There is no switching service for business accounts, you would have to change any DDs yourself, and give your new bank details to the people who pay you[/STRIKE]I stand corrected by YB's post - some small business accounts can be switched, but not sure you can switch a business account to a personal account or vice versa. Seems to be a moot point though in the circumstances.

YorkshireBoy

colsten wrote: »

There is no switching service for business accounts...

I'm no expert on business accounts, but according to this there is?...

What type of accounts can I switch using the Current Account Switch Service?

The Current Account Switch Service is for current accounts only. This includes personal, small business and charity current accounts.

Small business accounts are those with an annual turnover and/or balance sheet total that does not exceed €2 million (or sterling equivalent) and employs fewer than 10 people. Small charities have an annual income of less than £1 million and small trusts with a net asset value of less than £1 million.


http://www.simplerworld.co.uk/Pages/FAQ.aspx

jayjay21

YorkshireBoy wrote: »

I'm no expert on business accounts, but according to this there is?...

It doesn't mean you can switch a business account into a personal current account, for example, if you switched the HSBC business account to a Halifax reward account, it would be rejected due to the details not matching up at both ends.

You can however switch from HSBC business to another banks Business account with the switching service.

What you can do is switch to another bank that provide you with some free banking, I believe Lloyds do 6 months free for switching. Your other option is to open a new business account with Lloyds and take up their 18 months free banking, but you'd have to move everything yourself, there may be other offers about.

It is not worth avoiding £7 to have your account closed at such short notice.

Dobbibill

I don't think you would be able to switch from a business to a personal account. My understanding of the switching service is 'same name transfer' so eg I don't believe you can ask 'bank 2' for a sole account and transfer from 'bank 1' joint account. The names would not match! I would think this is where one of the flaws would be with 'business account' to 'personal account' eg business called '1967lettings' but personal account for '1967boy' along with other T&C's as mentioned above

DB

OhReally_2

You could ask HSBC to change your business account to a personal one

If they allow that based on what it's used for then I can't see any issue. I know many BTL landlords that operate their BTL using their personal account. It's not usually considered a business. I can't see any issue as you only receive a total of £1200 a month.

Then you could switch banks if you wanted to.

Alternatively, switch banks as a small business account holder, and then ask the new bank to change your business account to a personal one.

OhReally_2

colsten wrote: »

As your BTL is a business, however small, you need to keep it separate from your private accounts. ....

Really?

I understand this is a private individual. Even if he was considered a sole trader (which is not agreed) there is no obligation to keep separate bank accounts. Any money he receives is his.

OhReally_2

1967boy wrote: »

Hi have a small buy to let portfolio which I run for ten years through a HSBC business account and they have started to charge for the account ...

HSBC have charged for all their business accounts for about a year now

henm2

The cheapest of HSBC's small business tariffs is the Electronic Business Tariff (used to be called the direct tariff-minimum charge NIL) and is now a minimum of £5.50 a month.