Yorkshire Business Account / Bounce Back Loan

tedblight

So, 12 months ago I set up as a sole trader self employed. I opened up a Yorkshire Business Account. Fee Free for 12 months.

Business was (and still is) going well. I got a Bounce Back Loan in order to upgrade the van etc. (£5k)

In order to save on the Banks fees which are due to start, and also Realising that I can manage and organise my personal finances and work finances out of my Personal current account with first direct. 

I wrote to Yorkshire bank asking them to close my business account as it is no longer needed. I told them to set up a direct debit or standing order for my bounce back loan. 

They are refusing to do so. They say that the loan repayments must come out of an internal bank account.
So I asked them to open a fee free account and I will pay the loan from that. Again, they refused. 

Any other loans I could Nominate a bank account for repayments, seems I can’t with Yorkshire bank. Grrrrrr.

born_again

If FD see you running business out of a personal account, they can and will close it.

tedblight

born_again said:

If FD see you running business out of a personal account, they can and will close it.

Hi, 
I was told by an Financial advisor that as a self employed sole trader I can use a personal current account. Was I miss informed or is this a FD policy? 

mab3000

On page 4 of First Directs terms and conditions it says “Our accounts are not to be used for business purposes. If you need a business account, please give us a call and we can help you get in touch with HSBC UK who offer these”. 

There has been plenty of posts on here discussing personal accounts being used as business accounts and wether it’s right or wrong, but generally speaking, a lot of banks, if not all banks stipulate that personal accounts cannot be used for business purposes. 

jonesMUFCforever

If you don't like what you are being told - just repay the Bounce back loan and move your banking elsewhere.
In fact the interest saved on your loan is a lot lot more than the YB 's monthly business account fee.

Zanderman

tedblight said:

born_again said:

If FD see you running business out of a personal account, they can and will close it.

Hi, 
I was told by an Financial advisor that as a self employed sole trader I can use a personal current account. Was I miss informed or is this a FD policy? 

I'd get yourself a new financial advisor.
All banks, afaik, prohibit use of a personal account for business use. You may get away with it for a while, but there's always a real risk they will notice and close the account.  It's against the T&C you agree when you open the account.  A financial advisor should know this.
It is true that there's no legal reason - neither for accounting nor for tax purposes - that a sole trader legally needs a business account. HMRC don't care either way.  But that doesn't mean the banks allow it. 

tedblight

Every days a school day! Thanks for the information.