Buy to let bank account?

frugalfrog

Hi

I want to open a new account to keep my rental money separate from my current account, but I am struggling to find a current a/c suitable.

Income is about £450pm and exp around £230, I want to leave the balance in there for a "rainy day", so do want some sort of interest. I also want an account that can pay dd (mortgage/insurance) and a cheque book (plumber/electrician etc).

All of the current accounts need at least £500pm income, most want £1000. The "basic" accounts appear to not pay any interest at all, and really seem to be for people with bad credit etc.

My only other idea is to get a rubbish basic account and transfer the "rainy day" money into an ISA/savings, leaving a small floating balance in the current...

Steve_xx

TSB Classic Plus at 5% interest would be ok for this to start with. Yes it needs £500 a month feeding into it but there's nowt to stop you putting this in in two chunks of £250 of even five chunks of £100. and, it doesn't have to be left there.

Archi_Bald

Do you need a business rather than a personal account for this?

dr_adidas01

You might find you need to have a business bank account if you have a buy to let mortgage or are thinking of doing this.

You also need to tell HMRC about this to as there is also tax implications involved.

Most banks will not allow you to use a personal account as a business account.

frugalfrog

Hi, you only really need a business account if there are a lot of entries going through, especially cash deposits. There will only really be 2-3 entries going through this account a month.

I am fully aware of the tax implications (I am an accountant and run two businesses between my partner and myself), all declared and returned as it should be etc.

I will have a look at that Lloyds account, however, I did promise never to deal with Lloyds TSB again when they screwed up my partners credit score when they went bust, claiming he had 20p left on a credit card which was closed 5 yrs previous, but started chasing up for the missing payments, leaving red marks on his score! but ho hum ....

We have managed to negotiate to up the rent to £484pm (after letting agent took their cut), so could set up SO for £20 to take over the £500 limit.

Thanks

frugalfrog

I have just realised that that is TSB and not Lloyds will look at the TSB account

colsten

frugalfrog wrote: »

I did promise never to deal with Lloyds TSB again when they screwed up my partners credit score when they went bust

When did Lloyds TSB go bust?

grumbler

frugalfrog wrote: »

All of the current accounts need at least £500pm income, most want £1000.

Most current accounts don't require any income, but offer some benefits like, say, higher interest rate, if you meet the minimum monthly credit requirement.

10pence

frugalfrog wrote: »

Hi, you only really need a business account if there are a lot of entries going through, especially cash deposits. There will only really be 2-3 entries going through this account a month.

I am fully aware of the tax implications (I am an accountant and run two businesses between my partner and myself), all declared and returned as it should be etc.

What a worrying thought, especially from an account.

The number of transactions or deposit type is irrelevant as to whether you need a business account or not, it is what those tranasctions or account usage is for and rent from a buy to let could very well be deemed business income; rental income + self-assessment = sole-trader, therefore business account in the eyes of a bank.

If a bank states in it's T&Cs for personal accounts not for business use and they discover or 'think' it has been used for business they're within their rights to close it down.

jimjames

colsten wrote: »

When did Lloyds TSB go bust?

Or did they mean their partner went bust? I don't know when Lloyds went bust either....

colsten

Accountants sometimes do like to make up their own little world that bears no relationship to the real world. One famous example are Arthur Andersen, those accountants of Enron fame. The good news is that they generally don't get away with it.