Business bank forceably closed after 55 years... struggling to find a new one.

tuthai123

We are a family who have a general business partnership for an investment property. 

We receive rent directly into our separate personal bank accounts, and we have held a Barclays Business current and savings account for 50+ year for the day to day running costs, insurance direct debits and savings fund etc.

Barclays have now said they will close the account as we aren't "trading" and unless the majority of the income flows through the business accout we don't qualify as a business. 

Looking at other business accounts, we'd need to be incorporated, LTD, or LLP etc to qualify as well. 

We don't want a joint personal account as then our credit files are linked. 

I'm stuck. Surely there is a busiess accout for a partnership like this? Any help would be hugely appreciated. 

PloughmansLunch

Barclays allow partnerships to have business accounts, I know of one with 5 x signatories with pretty much the same business premise as yours (commercial property). I'm not sure why the business rent would go directly in to a personal account(s) as that seems like it could fall foul of T&Cs for personal accounts - is there a particular reason why it can't go into the business account first then income distributed to partners?

tuthai123

Thank you for your response. 

The rental income is collected by a magaging agent and distrubuted to us. It always seemed an additional unecessary step to send it through the business account.... until now it seems. 

Rental income into personal current accounts seems ok from what I understand. 

born_again

tuthai123 said:

Thank you for your response. 

The rental income is collected by a magaging agent and distrubuted to us. It always seemed an additional unecessary step to send it through the business account.... until now it seems. 

Rental income into personal current accounts seems ok from what I understand. 

In some ways you are lucky they have not closed your personal accounts for business use.

lr1277

If the rental property belongs to the partnership, which is an entity in its own right, surely the income should go into the account for that entity?

Your current setup seems to be:

rental income paid to the personal account of each partner.

Then each partner sends money to the business account to pay the costs associated with the rental property.

As Barclays will know this income for the account is coming from  the personal accounts of the partners (based on the partners' names and the names on the accounts sending money to the business account), you can understand them saying words to the effect of no trading activity.

I have no experience in this area but you could ask Barclays if they would change their mind if the income for this entity was paid directly into the business account.

Having re-read your original post, I think Barclays are saying you can keep the account if you put the income through the business account.

tuthai123

Yes, Barclays will keep the account if the rental income goes into it. 

To clarify - the magaging agent also sends the funds direct to the business account to pay for running costs. We don't send any funds from our personal accounts back to the business account.

It sounds like we need to run the income through the business account. We havent for 50+ years so it just seems a unnecessary step now. 

Section62

tuthai123 said:

Yes, Barclays will keep the account if the rental income goes into it. 

To clarify - the magaging agent also sends the funds direct to the business account to pay for running costs. We don't send any funds from our personal accounts back to the business account.

It sounds like we need to run the income through the business account. We havent for 50+ years so it just seems a unnecessary step now. 

Do Barclays know this money is for running costs, not rental income?  How did they find out the rental income was being paid direct by the agent to personal accounts?

Although it sounds like you have a straightforward solution, and it is understandable Barclays might shut the account if the majority of the income is going elsewhere, there's some aspects around the reason for closure which don't immediately stack up.

Have you got it in writing from Barclays that the account will stay open if the rental income goes into it?

MEM62

tuthai123 said:

The rental income is collected by a magaging agent and distrubuted to us. It always seemed an additional unecessary step to send it through the business account.... until now it seems. 

On the face of it, it would appear that making that small change is far easier and preferable to starting again with a new bank account.  

tuthai123

Barclays questioned it when they did a KYC of us. They haven't said they will keep the account inwriting but thye did verbally. I'll speak to them and try to keep the account with the income flowing through them from now on. It an extra step but yes, not too much hassle. 

Thanks for your input.