Current and business accounts... and HSBC
Thread poster: Burrell

Burrell  Identity Verified
United Kingdom
Local time: 04:45
Member (2004)
English to Latvian
+ ...
Aug 29, 2015

Having been caught in the middle of the yesterday’s HSBC payment fiasco (for those who don’t know – none of the employees, clients, friends etc. of the companies with an HSBC business account received their payments into their current accounts), and having had the most enlightening conversations with one of the many bank managers (I really liked their suggestions in this time of crisis – borrow from friends or family, and when that does not work – talk to our debt management department), I discovered an interesting tidbit.

It would seem that any self-employed individual with a current account who at the same time is not a proud owner of a business account, is committing an unpardonable sin and basically is a scoundrel. Apparently, it is against the rules to receive your earnings into the current account without paying the bank for the use of a business account. This kind of unlawful behaviour deprives the account holder of any chance of getting an overdraft or loan.
Now, I feel like either a complete idiot, very much like the lady who had always though that handbag is actually spelt as ‘hambag’, because somehow I have completely missed this information known to all and sundry, or (which is most probably) I feel exponentially more angry (if it was possible to feel more angry with the banks, ha!) with these wholly self-serving pr..ks, who somehow manage to steal more and more money from ordinary people with every passing year.

I actually remember very well the day 12 years ago when I opened my current account. A kind looking lady motherly asked me what the account was for and I explained that I was a translator and needed a bank account. ‘How wonderful!’ she exclaimed and promptly asked what languages I knew. This is where the happy conversation ceased – she had no idea where my homeland was and upon discovering the location was very impressed that we actually have a language of our own. I kind of clamped down after that, but in all honesty, it was 12 years ago.

However, at no point was I told – no, you shall not deposit your hard earned cash in an ordinary account. Quite the contrary – they have been happily grabbing my cash for the past 12 years and have even given me a loan and overdraft. All the time knowing I am self-employed, as they usually check if any information has changed since their last contact whenever you talk to them (I especially like the ones about ‘Have your contact details changed since the last time we spoke which was yesterday?’ Priceless.)

Now, at which point have I become this rule breaking heel who does not seem to know how to conduct business? When did it become illegal or immoral (although at this stage can we really say that doing anything against the banks’ rules could be immoral) to receive your earnings into a current account? What about other gainfully employed people? Will my legally employed husband at some stage will find himself breaking rules by accepting his earnings into a current account? Do all of UK translators have at least two bank accounts – current and business? And how come this is the first I hear of this?

Wow, I managed to rant and pose a question at the same time!

Ines


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Dan Lucas  Identity Verified
United Kingdom
Local time: 04:45
Member (2014)
Japanese to English
Depends, at least to some extent, on how you trade Aug 29, 2015

Burrell wrote:
It would seem that any self-employed individual with a current account who at the same time is not a proud owner of a business account, is committing an unpardonable sin and basically is a scoundrel.

If you are a sole trader there is no problem as far as the law is concerned. You are the business. If you use a limited company or some other vehicle with a separate legal identity then that would be a different matter - there must be a clear distinction between your assets and those of the business.

However, that aside my accountant (I think it was) did point out to me when I started my business that many current accounts do have small print that forbid business usage.

There may be some banks that do allow sole traders to use personal current accounts this, in which case you might want to move your account to one of those institutions.

Obviously it's in the best interest of the bank to get you into a business account and get you paying regular bank charges on that.

Regards
Dan


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 04:45
Member (2014)
German to English
+ ...
Not illegal for sole traders, I think Aug 29, 2015

It is my understanding that if you are a sole trader and not a company entity then it is totally legal to have a current account (and not a business account) and use that as your personal and business account. However, most accountants etc. would advise against it because if you come up for audit or something by HMRC, it would be more complicated and potentially problematic to sift through your account and separate everything personal from everything business-related. But it is not illegal, just not advisable.

However, if you are a company and not a sole trader, you definitely have to have a separate business account for the company.

That is my understanding of it.


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 04:45
Member (2014)
German to English
+ ...
Switch banks Aug 29, 2015

Dan Lucas wrote:
However, that aside my accountant (I think it was) did point out to me when I started my business that many current accounts do have small print that forbid business usage.

There may be some banks that do allow sole traders to use personal current accounts this, in which case you might want to move your account to one of those institutions


You could always switch to Halifax -- they don't offer business accounts at all, have always been good to me, and had absolutely NO problem with me receiving my business earnings into the account when I was a sole trader!

Edited to add: HSBC is absolute shite anyway, they have awful customer service and seem to be too big for their britches, as my mama would say. (Actually, being the southern American woman she is, she'd probably say they sit around acting like they own cotton in Savannah, but it's HSBC so they probably DO own cotton in Savannah! )

[Edited at 2015-08-29 15:43 GMT]


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Burrell  Identity Verified
United Kingdom
Local time: 04:45
Member (2004)
English to Latvian
+ ...
TOPIC STARTER
I will see how they treat me now Aug 29, 2015

If they come at me with guns blazing and accusations, I will switch an rub it in.

I just cannot believe that in all this time it never crossed their mind to mention this before. I have advertised my self-employment status on all their questionnaires, specified translation as a source of income on all applications, and not once, not one teeny weeny time was I asked - hey, how come you do not have a business account!'.

And really, let's face it - who reeds the small print?


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JaneD  Identity Verified
Sweden
Local time: 05:45
Member (2009)
Swedish to English
+ ...
Shame! Aug 31, 2015

Burrell wrote:

And really, let's face it - who reeds the small print?



Translators of small print everywhere will be shocked to hear this!

(But no, I don't either.)


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Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
Clue is in the name... Aug 31, 2015

Business account. What businesses have.



I don't see why you've got your knickers in such a knot, as you don't seem to have suffered in any way???

But I agree they are all ************.


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