Sole Trader Biz Bank Acc (UK)

The Lounge
#1

I’d be interested to hear anyones experience, positive / negative about opening a business banking account.

I’m leaning towards a challenger bank for simplicity but the more you look into them, perhaps they aren’t as convenient as they seem.

Do all of the challenger banks require you to authenticate using their mobile app? Any that don’t where you can access desktop without their app?

It seems like some banks ask for proof of trading activity, which seems strange considering you tend to want to open a bank in order to start trading… Are there any that account for this in the signing up process?

#2

I used Tide most recently and it was good - I think that was all done via mobile though.

A number of years back I had an HSBC business account but it was like going back into the past. We had to have a meeting with a person in an office.

Being a sole trader though you don’t need a business account as you’re not a a business - why do you want one? They normally have costs attached that would make them less appealing than a personal account and I think often you need to have a registered company to open one.

Caveat: This is not legal advice and I am not an accountant take anything I say as the ramblings of a mad man :upside_down_face:

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#3

Appreciate the reply. I have looked into Tide but it wasn’t clear to me if you could use it without the app authenticating it. Seems most of them have a desktop version for business purposes.

More that if there was ever an investigation into my tax affairs, it wouldnt require me needing to share anything from my current account.

I’m not averse to using something like Paypal which would keep things a little more separate but I have to buy materials which would be restrictive if only using online merchants.

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#4

Sounds suspicious :rofl: But in all seriousness I’d think opening a separate personal account would make the most sense if that’s the reason. If you want to register a company, get a biz account etc then you might as well set up as a limited company through an accountant and benefit from the tax efficiency, the cost would be outweighed by the savings and you don’t have to fill in any of the paperwork.

I could recommend a good accountant that uses Freeagent if that’s something that interests you feel free to DM me :+1:

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#5

Can recommend Starling, but no idea about the sole trader stuff. All app based though, but been a nice easy experience compared with the old school normal bank route.

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#6

I tried a few, traditional, and challenger. I tried Revolut, Monzo, and Tide for business. Then Starling came along. It’s the hands down winner. It blows me away every single day. Opening my account was a breeze, and done so quick, I don’t remember if it was minutes or hours.

I set up as a new trader with them. We also now have a joint account with two cards, and my partner and I have a personal account each.

I pay the additional £9 per month for the additional business features on my business account, but you don’t have to. Customer service is awesome, fast if you need it, slow if you don’t. You can lock down your cards if you lose them, or when in an unsafe environment. You can change your own contactless limits (I don’t choose £100 limit, I choose £50). You can now also create virtual cards for spaces in personal accounts, I’m not sure about the business account.

Payments and transfers are usually instant, larger sums of money (£1000+) might be up to 24 hours, but you can ask for them to escalate the payment speed if needed.

I am constantly recommending Starling, because it’s simply the best bank I have ever had, and I’ve had a few, both here and abroad. Speaking of that, you can also set up a second version of personal and business accounts in another currency. We have set up a € account, but I think you can get $ too.

I say, go for it, I’ve been with Starling since 2019, and I have had zero cause for complaint. How many banks can you say that about. Everything is dealt with in-app, and you can even view business statements and download or print out in a web browser.

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#7

@natehorn

:grinning: I prefer thieves to not have access to my personal goings on!

I’ve done the whole LTD before and now I just want the flexibility that sole trader offers, allows me to have multiple revenue streams and the ability to switch focus easier.

I thought that banks can shut you down if the think you are using a personal account for biz related activities. When people pay these days some banks try to collect the data for what the payment is for…

Thanks for the rec @brucegill

@ando - also appreciate the rec re Starling. Do you by any chance know what they require info wise to setup as a sole trader? They mention about maybe asking for proof of trading, will Paypal details suffice?

I have some recent income on there, however this is related to airbnb (we’re now renting out our place when we go away).

Further income will come from my new venture in May. As a sole trader you trade under your name I believe so hopefully that would suffice.

#8

Check this page out for current info on requirements for a Starling business account application.

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#9

Yeah. I’d seen that but Im not sure what I could supply them with based on my activity so far, most of those things don’t seem applicable in my case.

#10

This doesn’t sound right to me. The whole point of “sole trader” status is to allow trading trading as an individual without the structure of a business.

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#11

Apparently depends on T&C’s from the bank from the searches I’ve done.

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#12

Interesting! I guess this is where my knowledge on such things hits a wall a bit. Feels like you end up caught between two worlds a little.

Surprised about the trading info stuff too, both times I’ve started LTDs it’s been pre-revenue (by virtue of the fact that they’ve been new businesses) and my Tide account was set up in a matter of minutes.

Unless we have some accountants among us I’d be tempted to hit one up for some advice - this is the kind of info you shouldn’t have to pay for, maybe contact someone like Xero or Freeagent and treat it as a new business enquiry. “What do I do can you help” kind of deal, they likely deal with these questions a lot as they both serve sole traders.

Edit: Depending on the specifics of the T&C’s I wonder if sole trader revenue would count as business transactions, as you’re not a business. I’ve been a consultant in the past (sole trader) and not had a business account then - I got paid into my personal account and that was a regular HSBC account at the time.

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#13

It’s four years since I joined Starling, so I don’t remember having much to show for it, but I did have a Tide account for around a month first, so I think I showed details of that, and a link to my website and online store.

If I could remember, it wouldn’t be relevant today, most likely.

If you have AirBnB business activity, you can show details of your AirBnB page, and your payments and receipts page from that account, and your PayPal account, and the personal current account you withdraw those payments to. That would be enough most likely, and if not, they will tell you what they need. I was most surprised how little I had to show to set up my account with them.

Good luck, and I say, just apply, be honest and tell them what you have, and they’ll tell you what you need to present to them if you don’t offer it, and then you can get that proof, and you’ll be done. I wouldn’t be feeling so daunted. As I said, I have never had such a positive experience with any bank, of any kind, in any country, or online, as I have had with Starling. Just go for it. You have nothing to lose. If they turn you down, they will say why if you ask, and you can bear it in mind when applying for something else.

I seem to remember Monzo and Revolut weren’t too bad, and maybe Revolut was the easiest to set up a business account, maybe Tide. But I wouldn’t trade my Starling accounts for anything in the world right now.

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#14

Have been a sole trader (sub contractor) for over twenty years using a personal account and never had any trouble. Had two accountants during that time and neither ever mentioned any problems.

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#15

Im not in UK, (AU) but I am a sole trader (also sub contractor) No need for a seperate business account. I asked the tax department before I started operating, they told me sole traders dont need a seperate business account.

All the accountant wants to see is a record of invoices.