Sole Trader Banking using Trading Name

AmberandBlack

I opened a Sole Trader account with Starling a few months ago - all good and the payment notifications are very useful.    However, when my customers are making payments to the account they can now only do this by entering my personal name because of the new account name checking process being rolled out.   This is not great from a business credibility perspective as I am just starting out and as I am competing with established companies, I don't really want it so obvious that I am just a one-man-band.   Starling advised (after a horribly long wait on 'live chat' that there is no way around this and that customers can only enter my name to complete payment and not the name that I am trading under - although my business account on their app clearly shows the latter.  Even my debit card contains my trading name that they are looking to inconveniently avoid.  As a result customers can only make payment by entering my full name, as even using an initial will be rejected.

Whilst this is just an inconvenience at the moment and will require me to update quotations, invoices and contracts I can see that it could get messy further down the line if I grow a little, and so I want to nip it in the bud before things (hopefully) take off a bit.  It also seems pretty unprofessional paying John Smith (not my real name!) when the work is seen to be performed by a small business such as Acme Motor Care (also, my real business!).

As a result I am looking at moving away from Starling as I can't see the point in having a business account with them - I already have a personal account that is unused as that was a requirement to open the business one (what is that all about? - I could have just used that for the same effect!).  The only difference between the accounts is the turquoise and black debit cards.

So, forgetting Starling, what is the best bank to open a sole trader account with, where the account can be in the name that I trade under rather than my personal name?  One of the main high street banks perhaps if free business banking is still a thing?   If not, then it might be a small price to pay to give my small business its own identity.  All my payments in/out will be via bank transfers/standing orders with no cash or cheques required.   Thanks in anticipation.

HHarry

This is from the Lloyds website;

To help you avoid paying the wrong account by accident, make sure you ask the recipient for the correct name on their account:

• If you're a paying a person - use their first or main name and last name
• If you're paying a business - use the business name or trading name registered to their account.

My business account is named ‘J Smartypants T/A Smartypants Inflatables’, so I’d assume that Smartypants Inflatables would be classed as a trading name and be OK.  But I haven’t had any new Customers pay by transfer lately, so I can’t confirm that.

Archi_Bald

Having made a faster payment recently to a Santander business account, I know that they use the company name. I don’t believe they do a free business account though, and I don’t think many others do. You might find some introductory offers which give you a few free months at the start.

AmberandBlack

HHarry said:

This is from the Lloyds website;

To help you avoid paying the wrong account by accident, make sure you ask the recipient for the correct name on their account:

• If you're a paying a person - use their first or main name and last name
• If you're paying a business - use the business name or trading name registered to their account.

My business account is named ‘J Smartypants T/A Smartypants Inflatables’, so I’d assume that Smartypants Inflatables would be classed as a trading name and be OK.  But I haven’t had any new Customers pay by transfer lately, so I can’t confirm that.

The most recent payment that was declined was from a Lloyds customer.   They used my trading name that the account is named as with Starling and it was only accepted by changing it to my name - presumably because that's the name on the linked personal account (which I don't use).  Using the example above even my debit card says "John Smith, for Acme Motor Care".

I can't see any benefit in having a sole trader account with Starling as I assume their systems send 'John Smith' and not 'Acme Motor Care' when they receive the request.  Apparently even 'J Smith' would be rejected.  So just need a proper bank to give my new business some credibility - and changing to Limited is cost prohibitive at the moment as all my profit would get used up on accountancy fees.

penners324

Confirmation of Payee works the same across ALL banks, switching banks wont solve your issue. 

penners324

Switching to a different bank will eat up your profit on bank charges as well

Archi_Bald

There must be a misunderstanding as you can override the warning in Lloyds and pay with whatever name you like. I understand the issue with Starling not using the business name but it‘s not really an excuse for not paying the bill.

AmberandBlack

penners324 said:

Confirmation of Payee works the same across ALL banks, switching banks wont solve your issue. 

That's not the problem though.   If Starling returned my trading name rather than the pointless personal details then all would be ok.   So switching banks will address the issue if I can use my trading name with them.

AmberandBlack

Archi_Bald said:

There must be a misunderstanding as you can override the warning in Lloyds and pay with whatever name you like. I understand the issue with Starling not using the business name but it‘s not really an excuse for not paying the bill.

They did pay the bill but I had to request that they used my name rather than my business, which as I noted above reduces credibility and defeats the object of having a business account.

AmberandBlack

penners324 said:

Switching to a different bank will eat up your profit on bank charges as well

HSBC which I have used before is/was £6.50 a month with no fees for electronic transactions.  That could be a cost I have to incur to get over this issue as Starling are incapable of addressing the fundamental issue.

Zanderman

This does, as the OP says, highlight ongoing difficulties with CoP processes.
A similar issue arose for us recently when switching business bank account from Yorkshire to TSB.  It turned out not to matter but it did worry us for a while.  All to do with matching the account name - a pre-requisite for a successful switch:

Our business account with Yorkshire was, on all our documentation - statements, cheque book etc "Mr Andrew Smith and Ms Beverly Jones T/A Acme Products Trading".  (not the real name, obvs!)
The space to enter the account name on the online TSB switching form was far too short for this - didnt allow that many characters. And as the business is called Acme Products Trading I decided, after a lot of hesitation, to put that in.
But I rang TSB afterwards to ask, as switched accounts must have the 'exact' name as each other (what we've always been told for personal accounts anyway), whether this would be a problem.  Especially as we'd only get the 2 year fee-free tariff if it was a successful switch.
TSB CS didn't seem sure - but went off to get advice from the switching team - who eventually came back to say yes that should, probably, be fine - they didn't seem quite sure either.
And, long story short, it was fine, the account was switched successfully.
But it is no longer called "Mr Andrew Smith and Ms Beverly Jones T/A Acme Products Trading" it's just "Acme Products Trading" on all the TSB documentation.  So the account has changed name.
And it would seem that, for switching, Yorkshire and TSB agreed that the original long name with our personal names and business name was the same as just the business name.  Which seemed odd to me.  And, further to that, we've now lost - I assume - the ability to pay into the account a business cheque made payable to Mr Andrew Smith - which we could (and did ) before.  So we've lost some flexibility.

I assume, for us, that CoP will now say "Acme Products Trading"  and not our personal names. 

Not the same situation as the OP, indeed almost the opposite, but an indication of the confusion that can arise from account names.

And, edited to add, switching to TSB like this would therefore solve your problem OP - assuming they did the same as they did for us - but TSB do charge for business accounts, so it would cost you money after the intro 2 year period ( and in case you're wondering, we don't business bank with starling as they don't, yet, support partnerships)