Help for self employed that has used current account for years thinks may need a business account

marmitewasere

Holistic therapist has been using their personal current account as self-employed but is now in a blind panic as they've realised they're possibly in breach of their building society terms and conditions!

They're now terrified and keen to put this right urgently but doesn't know how to open a business account or how to transfer the funds in the current account, to a new business account (plus direct debits).

Their current provider doesn't offer a business account so it would need to be a different bank and the whole account would have to move.

They need to do this urgently as they want to do things correctly despite only realising this now after several years of self employment! Their accountant has never flagged it nor have the building society raised an issue but I guess it's a matter of time before they question. 

Any advice on what they should do and who they should go with as I have no idea being PAYE employed myself! They can't be the only person who has experienced this but I've got no idea so hoping you wonderful people can advise as they're in a right pickle. 

JGB1955

How about Starling?  They offer an app-based, free, business account.  

marmitewasere

JGB1955 said:

How about Starling?  They offer an app-based, free, business account.  

Thank you, that's great, I'll suggest they look at starling. Have you ever used them or or converted a personal current account with another building society over to a business account. They just want to move it all to a business account so it's definitely not breaching terms and conditions. No idea how easy that is to do! 

Emmia

marmitewasere said:

JGB1955 said:

How about Starling?  They offer an app-based, free, business account.  

Thank you, that's great, I'll suggest they look at starling. Have you ever used them or or converted a personal current account with another building society over to a business account. They just want to move it all to a business account so it's definitely not breaching terms and conditions. No idea how easy that is to do! 

But they can be fussy about applicants.

I know two self employed people who were declined, despite holding a business account / being self employed for many years, and who are very profitable - healthy turnover etc. 

Both eventually opened accounts with Lloyds.

lr1277

Do they actually use that account for their own personal expenses? If so, once the business account is opened they would have to transfer their business dd’s manually to their new account.
But business accounts can be moved using CASS. What I don’t know is if a personal account can be transferred using CASS to a business account.
Edited to add: the other suggestion I have seen is to not have their personal account at the same institution as their business account. If at the same institution, problems with one account can affect the other account.

marmitewasere

lr1277 said:

Do they actually use that account for their own personal expenses? If so, once the business account is opened they would have to transfer their business dd’s manually to their new account.
But business accounts can be moved using CASS. What I don’t know is if a personal account can be transferred using CASS to a business account.
Edited to add: the other suggestion I have seen is to not have their personal account at the same institution as their business account. If at the same institution, problems with one account can affect the other account.

I understand they only use that account for their self employed income and limited outgoings so it's separate but I understand they have everything with that building society. 

TonyMMM

I ran my business as a sole trader using a Santander 123 Current Account ( separate from my main personal account)  for over 10 years. That was on the the advice of a Santander clerk in my local branch .....earnt a lot of interest on it, and no fees.

It is a breach of the conditions, but much will depend on the number/type of transactions that are going through.

marmitewasere

TonyMMM said:

I ran my business as a sole trader using a Santander 123 Current Account ( separate from my main personal account)  for over 10 years. That was on the the advice of a Santander clerk in my local branch .....earnt a lot of interest on it, and no fees.

It is a breach of the conditions, but much will depend on the number/type of transactions that are going through.

They're a busy holistic therapist and reiki practitioner so several £30-£150 from clients paying for services. They're only 3-4 days a week. I'll suggest they apply for a monzo business account ASAP as they' genuinely had no idea and is desperate to put it right before they get in trouble! 

SacredStephan

Try Zempler Bank, formerly Cashplus.

dinosaur66

same as tonymmm

i have been self employed for decades

street market trader / landlord / wholesaler /online ebay shop /house flipper/investor

no bank ever has insisted on me having a business account and nor has hmrc.

but it could be type of business you have that you need a business account

i have never needed finance/credit rating/notes or coins in denomination //to bank daily or weekly cash /

hmrc help / bookeeping help

i just transfer my funds that go into my current account into various savings accounts like one for hmrc bill / one for property expenses / etc etc

Olinda99

business account or not, it is probably good practice to keep your personal and business transactions separate, preferably in different institutions.

Yes for accounting purposes but also you only need to have one dodgy payment to get your account frozen.