Co-Op closing freeflow account - alternatives?

In message , John Stumbles writes

I use my Clydesdale account for both personal and business transactions, but that probably doesn't help if you are 'down south'. Clydesdale knew that was the plan when the account was opened, and seem quite happy.

Don't forget that a lot of bank transactions can be undertaken at your local PO. Not sure exactly which banks in England, though. Here in Scotland we offer various combinations of paying in cash and cheques, withdrawals and balance enquiries for most of the Scottish banks, Lloyds TSB, Co-op and others.

Take a look at Nationwide who offer a wide variety of accounts and most things can be done online.

Peter Crosland

A few thoughts...

I would expect a lot of bank branches to go -- they're expensive and banks are basically bust. Picking a bank because it has a branch near you might be only a short term thing. Building society could be a better bet there.

BACS payments: Speed: You might find some accounts still process BACS payments slowly. I notice Barclays seems well connected for fast payments, but can't make fast payments to Nationwide, so that might not be. Payment reference: Some accounts give you no information on where or who a BACS payment has come from, and no payment reference (e.g. Nationwide, although maybe they do for business accounts).

I use Smile (Co-op's internet banking subsidiary). I've been very pleased with it. You can set up extra (up to 20) sub-accounts that you can access from the one log-in. These all pay extra interest (1% now IIRC). I use one as a short-term "savings" account. Another for my business (which they seem OK with). They all have proper account numbers and sort codes so you can pay cheques into them directly, and in/out via BACS.

Jon.

Possibly not. I used a building society current account when I first set up my business and after three months got a shouty letter from the bank manager telling me to get a proper business account. I hadn't done anything wrong and had built up a substantial amount of cash in the account, but they refused to let me run the account as a business account. Woolwich BS, if that matters.

The Co-op seems to be one of those.

I'm a VAT registered sole trader. I have a HSBC Business Direct account

for that with a Business Money Manger account (pays better interest). Transfers between those accounts are instant. Not the up 2hrs Faster Payment instant, I do mean instant.

Bill payments from the BD acct to other normal bank accounts generally u se the Faster Payment service these days. It's when you start trying to sen d money to building societies or banks that were building socities that things fall back to slow old BACS.

No has mentioned charges. The HSBC Business Direct Account is managed online and provided you don't use too many cheques (20 in or 20 out per

month) or handle cash over the counter (always 2% charge ) or take more

than £1,000/month from an ATM there are no charges not even an "accoun t maintenace fee".

Take a look at their web site:

In these times it might be worth bearing in mind that HSBC have not take n any of the UK Governments handouts to the banks. This either means they

have a good sound business model and really don't need 'em, or they proping themselves up from other countries governmental hand outs or the y will go bust tommorow...

Some transfers in to my Coop a/c are same-day, some 2-3 days. I don't know how long transfers out take.

Alliance & Leicester Commercial Bank are very quick for transfers in, depending on the sending bank. SWMBOs business account shows payments before we even see the e-mail payment advice.

For a flexible mortgage you could do a lot worse than The One Account:

- No pissing about with offset or linked accounts, everything in one place with one bottom line

- Free banking

- Transfer in or out to from any account

- No limits on the number of transfers or the amount you overpay

- Base rate cuts always passed on (in full, I believe)

- free ATM use at Lloyds and, I believe, NatWest The credit interest is piss poor but if you are often in credit, it's probably the wrong type of account for you.

Again, business use may be frowned upon. How do they know, anyway, if you stick within the transaction limits?

MBQ

Is it not a requirement (probably of HM Revenue and Customs) to have a business separately accounted for? In other words, there should be a separate bank account that is used only for business ...

Your accountant would of course be able to advise on this.

Hardly a surprise, as the whole principle of business versus private accounts is that the charges levied on business accounts allow private accounts to be comparatively free of charges.

Note "comparatively".

Not, I think, if you are a sole trader. There's just a requirement that proper records are kept.

A limited company would be a seperate legal entity so should have it's own bank account.

You really wouldn't want to pay the accountant to sort out an entire years trading from a years personal expenditure in one bank account, although some overlap is inevitable such as petty cash receipts and disbursements.

derek

My accountant (ex HMRC: is that gamekeeper turned poacher? ;-)) hasn't indicated any problem with my bank account arrangements. I give him my trading figures on a spreadsheet printout and he does the rest.

I don't understand why anyone pays bank charges on their private accounts. I can't say I've never paid charges over the last 30 odd years as there have been a couple of timing errors and rubberised cheques. But I have never paid any routine charges for paying in or taking out money etc. One bank did try it on, they got very short thrift, didn't pay the charges and closed the account.

Fortunately my business use of cash is minimal and cheques in and out total 10/month at the very most. So I get free banking on my business accounts as mentioned previously.

That is my understanding. *All* sole traders assets are at risk if their business fails owing money, their home, everything. Having a seperate business account in the business name can be useful though if you need to convince HMR&C that you really are self employed or you want to get credit/access to "trade" suppliers.

Virtually any other trading form is a seperate legal entity. It is wise to have seperate bank accounts, if that entity does go t*ts up any creditors can only get at the money in the accounts held by that entity.

Business accounts which have very few transactions are a loss leader. The banks obviously hope that businesses with such accounts are start-ups that will grow quickly and start paying standard bank charges before too long.

Your accountant is covered because he can only draw up your accounts based on what he is given. However, if HMRC ever call in your accounts for investigation, you will be required to provide bank records, and then your problems will begin.

Well, even if you have a separate business bank account, they will almost certainly still want to see your personal bank records too, so you would have the same problem. They'll want you, at least, to supply them with a credible explanation for each credit entry on your bank statements which you have not already listed in your business accounts, as to why it is not taxable income of one sort or another. Provided you annotate your bank statements suitably so that *you* can tell what's what, you should be OK.

When I started my first business the Inland Revenue strongly advised a separate business bank account. However, looking at their current guidance for new business start-ups - available online - HMRC no longer even recommend it.

I still keep separate accounts as I don't want the hassle of separating business from private transactions in one account. To have a joint account with one account holder using it for business as well as private transactions appears to me to be asking for problems.

I suppose I'm just old-fashioned. ;-)