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For the last ten years or so i have had a bank account in which all my personal buy to let rental income is paid into.
I just had a call from my relationship manager who said as it was buy to let properties that the payments related to. I needed to have a separate account.
These buy to lets are all in my name and the account is my personal account.
It has been fine for the last 10 years not sure why they want to me to change it will be a struggle as i would need to tell all my tenants new details.
My accountant says the personal account is fine.
I do a self assessment each year and these are my personal properties?
Any advice would be gratefully appreciated.
I suspect the bank would like you to have a business account for which they can charge for payments in, out etc. I'd be looking to change my bank if they insist.
I agree with 'livefortoday', if they insist on you opening a business account, simply change banks.
It's all done by them nowadays, so really simple to switch.
Yes - they must have clocked the transactional level and want you to open a business 'sole trader' account which will carry fees.
I managed to sidestep that by running my BTL through one of my bank's "Premier" accounts, which are fee charging, so the bank gets some fees to appease them, but which offer travel insurance, AA cover etc for free under their premium account. Meanwhile the monthly charge is at least a business expense for tax purposes.
To be fair it is handy having the BTL transactions in a separate account - its simpler to prepare and if ever necessary, support tax returns.
Yes most banks don’t like business transactions going through personal accounts. I had the same issue with First Direct. I think Metro bank has free business banking and have been recommended to me, although I don’t have any personal experience of them.
I use HSBC banking and pay £5.50 a month. In the scheme of things it’s no so much money.
Can you share want bank would do this?
They would probably want you to do it in a business account, even though you are renting in your personal name. They will view operating a rental business - as a business.Though I would certainly complain if your sort code and account number changes, when they move you to a business account.
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
Hi it is barclays....my problem is many people pay rent in cash at the bank. If its a flat fee of x pounds a month that is fine. But if they start charging me per transaction as well as a monthly fee it starts to add up drastically.
Thats the problem they will charge for cash being paid in . Depending on how many tenants do this then it mounts up .
This happened to me last year . Been with First Direct for years and then suddenly they wanted me out saying I was self employed.
I have never known it any other way ... my accountant from the off suggested a separate business account for rental income and expenditure ... for me it makes it easier to send in my end of year account information and keep things separate from other personal transactions .
Are you actually using it for anything personal ? - I've got a similar thing, a 'personal' account that all my personally owned BTL stuff goes through
- and I've got other current accounts with other banks that all my own really personal stuff goes through.
If you're mixing it up then just open another current account somewhere else and use that for your properly personal stuff and leave the other account the way it is.
DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.