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Switching bank accounts from personal to business


Skxawng

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I've been using a personal bank account for many years now to receive payments from customers via bank transfer, gocardless and the occasional cheque. I also use it for personal things too. 

I've checked it out and as a self employed sole trader, trading under my own name, there is no legal issue using a personal account for my business and HRMC has no issue with it. 

Yorkshire Bank has contacted me to say that I shouldn't be using their current account to receive money from customers and that I need to set up a business account. 

Im a bit annoyed at this because, although I don't mind the paying monthly fee for a business account, I've got my work really well organised now and 95% of my customers are direct debit or bank transfer. A lot of older customers have had to go to a lot of effort to get a family member to set it up for them, and it was quite a battle to get some customers off cash without losing them. 

So I'm pretty worried about the disruption that would happen if I tried to get all my bank transfer customers to pay into a new account, and I know that many will just continue paying into the old one. Some have visited the branch and set up a standing order and I literally haven't seen them for years, the money just appears every month. 

If I were setting up a new business now, I would use a business account, but this has built up very gradually over the last 14 years. 

Has anyone else had this issue?

Have you been able to contest it? (Ive read its upto the branch's discretion) 

Is it possible to convert a personal account into a business account-keeping the same account number, sort code and account name? 

Thanks

 

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9 minutes ago, Skxawng said:

I've been using a personal bank account for many years now to receive payments from customers via bank transfer, gocardless and the occasional cheque. I also use it for personal things too. 

I've checked it out and as a self employed sole trader, trading under my own name, there is no legal issue using a personal account for my business and HRMC has no issue with it. 

Yorkshire Bank has contacted me to say that I shouldn't be using their current account to receive money from customers and that I need to set up a business account. 

Im a bit annoyed at this because, although I don't mind the paying monthly fee for a business account, I've got my work really well organised now and 95% of my customers are direct debit or bank transfer. A lot of older customers have had to go to a lot of effort to get a family member to set it up for them, and it was quite a battle to get some customers off cash without losing them. 

So I'm pretty worried about the disruption that would happen if I tried to get all my bank transfer customers to pay into a new account, and I know that many will just continue paying into the old one. Some have visited the branch and set up a standing order and I literally haven't seen them for years, the money just appears every month. 

If I were setting up a new business now, I would use a business account, but this has built up very gradually over the last 14 years. 

Has anyone else had this issue?

Have you been able to contest it? (Ive read its upto the branch's discretion) 

Is it possible to convert a personal account into a business account-keeping the same account number, sort code and account name? 

Thanks

 

They will suggest you have a business account as they want to charge you for it , but they cannot force you to change it , just keep going as you are would be my advice call there bluff I will be very surprised if they don’t back down . I would threaten to take my business else ware if they continued to harass me about something that is totally legal .  Which bank is it ? 

Edited by Pjj
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Open a Starling Current Account  and Add a Bussiness Account on  the App.    No fees as of yet.  

Gradually change some customers onto it .   It wont take long .   

They have a great App to see whos paying and  when.  A click away , with lots of add ons  you can use

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8 minutes ago, Pjj said:

They will suggest you have a business account as they want to charge you for it , but they cannot force you to change it , just keep going as you are would be my advice call there bluff I will be very surprised if they don’t back down . I would threaten to take my business else ware if they continued to harass me about something that is totally legal .  Which bank is it ? 

It's Yorkshire Bank, they told me I'm not allowed to have customers pay in and have to stop them but I told them I'm not sure if I can stop them. If I'm forced to close my account due to a breach of terms and conditions or something like that then I certainly won't be opening a business account with them and would go elsewhere.

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3 minutes ago, Part Timer said:

Why not ask them to keep this as your business account and set up a different personal account.

If they say you can't tell them you're taking your business elsewhere.

When they called, I asked that but they said they don't think they can do that but they're not sure--I'd have to speak to a manager at the branch. I said give me a bit of time to consider my options and I'll call the branch. 

I'm a bit wary of calling back as I don't want them to give me an ultimatum. 

I can't put it off indefinitely but I'm trying to get all the info I can before I call. 

 

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53 minutes ago, Skxawng said:

When they called, I asked that but they said they don't think they can do that but they're not sure--I'd have to speak to a manager at the branch. I said give me a bit of time to consider my options and I'll call the branch. 

I'm a bit wary of calling back as I don't want them to give me an ultimatum. 

I can't put it off indefinitely but I'm trying to get all the info I can before I call. 

 

Go on their website and look at T&C of the account you have. That's your starting point, see if you are breaking any rules. If you are breaking rules then start by asking them for a solution to keep the account number to use as dedicated business account. 

Sometimes they try it on. Keep things as polite as possible and ask them to work with you to resolve the issue. Ultimately if they won't allow you to keep account move to another bank. You might be able to use switching service which still enables old payers payments to be transfered to new account while you tell them new account details. 

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23 minutes ago, ched999uk said:

Go on their website and look at T&C of the account you have. That's your starting point, see if you are breaking any rules. If you are breaking rules then start by asking them for a solution to keep the account number to use as dedicated business account. 

Sometimes they try it on. Keep things as polite as possible and ask them to work with you to resolve the issue. Ultimately if they won't allow you to keep account move to another bank. You might be able to use switching service which still enables old payers payments to be transfered to new account while you tell them new account details. 

Thanks good idea. Just found the t+c's and a relevant bit of info:

"2. Eligibility for an Account

You may need to meet some eligibility criteria before you can open an account.We

will tell you what these are before you open the account. Sometimes if you no longer

meet the eligibility criteria we have to close the account. If this happens we will offer

you another account unless you do not qualify for any of our accounts, there is a

legal reason why we cannot do this or you have seriously or repeatedly breached this

agreement. A Personal account must not be used for business purposes or business

transactions. If we find out that you are using this account for business purposes, then

we will require that you open a separate business account."

I never read that, but then again I opened the account in my early teens and wasn't into reading lengthy legal documents! 🤣

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OK so they are within their rights as long as T&C were the same when you opened or somehow they forced you to accept them some other way. 

So now look at a starling account as a backup as it's free. Plus a personal acc with rival bank. Speak to bank and give them a bit of a buttering up. Like you have banked there since child, so sorry didn't know t&c... Ask them to help as lots of your custys are old and self isolating etc. Any way you can have new personal acc and convert existing one into business acc happy to pay business charges etc. 

If they won't play ball say OK thanks but I am taking my personal acc to x and business to Starling unless they can find a way to help. 

Try and get them to help but don't have a go at them, say you understand their position but in these difficult times do they have discretion to help? 

Read how to win friends and influence people 😃

Good luck let us know how you get on. 

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Just change it over. Close the old one and send everyone an email or message explaining..

you can’t keep same details.

if you try a phased approach people mostly just don’t do it and I know from my experience.

change it. Their payments will fail  and they will get in touch or just be prepared to do more chasing for the month or so after changing. It seems more worse than it will be.

 

when we changed bank with around 500 clients. About 2 thirds read the email and made the adjustment. The rest just keep paying into old despite being told multiple times.  Closed the account and they come to you saying it hasn’t worked. Handful just keep it incorrect until you specifically highlight them to it.

 

brif but hope that adds some insight.

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24 minutes ago, Skxawng said:

Thanks good idea. Just found the t+c's and a relevant bit of info:

"2. Eligibility for an Account

You may need to meet some eligibility criteria before you can open an account.We

will tell you what these are before you open the account. Sometimes if you no longer

meet the eligibility criteria we have to close the account. If this happens we will offer

you another account unless you do not qualify for any of our accounts, there is a

legal reason why we cannot do this or you have seriously or repeatedly breached this

agreement. A Personal account must not be used for business purposes or business

transactions. If we find out that you are using this account for business purposes, then

we will require that you open a separate business account."

I never read that, but then again I opened the account in my early teens and wasn't into reading lengthy legal documents! 🤣

Moat likely they have changed T&C's loads of times since you opened the account, I never read banks T&C's 

My accountant always told me it's better to ensure personal and business transactions are kept separate as to be using an account for both could cause potential issues and clearly it has, more so if HMRC come a knocking. a personal account I don't believe can simply be switched to a biz account using the same account details. 

I have had a business account for almost as long as I have ran my business which has been over 20 years, this avoids any issues whatsoever I felt I had no choice when people were sending me cheques payable to my business name it just seemed that best and most professional thing to do 

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2 hours ago, Skxawng said:

I've been using a personal bank account for many years now to receive payments from customers via bank transfer, gocardless and the occasional cheque. I also use it for personal things too. 

I've checked it out and as a self employed sole trader, trading under my own name, there is no legal issue using a personal account for my business and HRMC has no issue with it. 

Yorkshire Bank has contacted me to say that I shouldn't be using their current account to receive money from customers and that I need to set up a business account. 

Im a bit annoyed at this because, although I don't mind the paying monthly fee for a business account, I've got my work really well organised now and 95% of my customers are direct debit or bank transfer. A lot of older customers have had to go to a lot of effort to get a family member to set it up for them, and it was quite a battle to get some customers off cash without losing them. 

So I'm pretty worried about the disruption that would happen if I tried to get all my bank transfer customers to pay into a new account, and I know that many will just continue paying into the old one. Some have visited the branch and set up a standing order and I literally haven't seen them for years, the money just appears every month. 

If I were setting up a new business now, I would use a business account, but this has built up very gradually over the last 14 years. 

Has anyone else had this issue?

Have you been able to contest it? (Ive read its upto the branch's discretion) 

Is it possible to convert a personal account into a business account-keeping the same account number, sort code and account name? 

Thanks

 

Withdraw your funds and go elsewhere. That's BS. You can use a personal account without an issue.

Just open ather current account with another bank for business use so its easier to account for incoming work related funds 

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Thanks for the help everyone, I'll try it on with them, but seems inevitable. 

I just wish that the customers had used the 1st line of their address as reference as requested instead of "Window Cleaning"! That's how they noticed...

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1 hour ago, Skxawng said:

Thanks for the help everyone, I'll try it on with them, but seems inevitable. 

I just wish that the customers had used the 1st line of their address as reference as requested instead of "Window Cleaning"! That's how they noticed...

I would speak with the manager and present him/her the options.

1. you work out a mutual solution affording you both the continued benefits and they screw the nut and calm themselves down about it.

2. you cancel the account and go elsewhere. The money that get paid into your account and net balances that remain are used by the banks for fractional reserve lending so you actually have less to loose than them by going elsewhere.

I would speak with manager and explain that we can either do this x or y way. I would prefer to stay with you but the choice is yours. Email me within 7 days and let me know. If I don’t hear from you by day 8 I’ll take that as my que to cancel and go elsewhere.

in all honesty most that work in banking have no idea how it actually works. While the banks run the game the customers have more control than all parties ever realise. 

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  • 2 weeks later...

I assume you have probably come to a decision by now but if not it might be useful for you to know that if you switch your personal account to a new bank then any payments to your old account will automatically get forwarded to the new account for a min. of 3 years, in which time you can get everyone paying to a new account. (Just make sure whatever bank you choose guaranties this)
 

so if I was you I would use a bank switching service for your personal account and i would also set up a business account, then all your payments that get forwarded to your new personal account I would send to the business account every week or month as wages to yourself. But also try and get people to just start paying directly to the business account so eventually you don’t have to be manually moving the money over.

You can then also keep your personal and business expenses to the correct accounts and this will make your tax easier etc.

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10 hours ago, danzlfc said:

I assume you have probably come to a decision by now but if not it might be useful for you to know that if you switch your personal account to a new bank then any payments to your old account will automatically get forwarded to the new account for a min. of 3 years, in which time you can get everyone paying to a new account. (Just make sure whatever bank you choose guaranties this)
 

so if I was you I would use a bank switching service for your personal account and i would also set up a business account, then all your payments that get forwarded to your new personal account I would send to the business account every week or month as wages to yourself. But also try and get people to just start paying directly to the business account so eventually you don’t have to be manually moving the money over.

You can then also keep your personal and business expenses to the correct accounts and this will make your tax easier etc.

That's great to know thanks!. I'm sorting it out this week so going to look into that. 

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On 16/12/2020 at 09:16, Skxawng said:

That's great to know thanks!. I'm sorting it out this week so going to look into that. 

Just a heads up, I tried switching banks about a month ago due to poor customer service, at that time non of the major banks were accepting any new customers blaming it on the virus [quite why a virus stops banking is anyones guess, maybe they think it's a computer virus?].  The only bank that I could get was Starling but due to slow postal service the debit cards took 2 weeks to arrive, probably longer now.  I've not yet had time to set it up but I've heard very good reviews about Starling.

 

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If you still get some cash, then you also want a bank where you can pay it in at the Post office, I still get a decent wedge of cash off the old folks I want it off my hands ASAP as I don't like cash in the house. 

 

Customer service for me doesn't really come into anymore with branches closing, I was with the Hbos then the Halifax closed branches then switched to NatWest for personal and business and it closed the last bank we had in the village, my business banking is with Lloyds and the app is really good which is more important now than customer service. 

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