Recommendations for a bank offering a business account to Britain-based seller?

[neil-h]

I am about to start a business as a sole trader selling stuff (books) on Ebay and Amazon, from Britain where I live. What banks do people recommend for opening a suitable business account? The main requirements are

1. Money in account protected under Financial Services Compensation Scheme.

2. Low charges. (A fixed amount per month is OK if reasonable.)

3. Good write-up from existing customers. I.e. I want to avoid a bank that loads of people complain about the poor service of. OK, this is an obvious criterion, but I thought I'd put it in anyway. Poor service would cover the case where a bank has a reputation for continually holding transactions up while they ask lots of questions. I am completely legitimate, acting under my real name, and I pay my taxes, but there is simply a limit to the number of unnecessary questions I'm willing to put up with from a bank.

4. Must not require installation of an app on a smartphone, but must allow web access. (The Co-op Bank seemed to have an OK account, but they fell at this hurdle. They told me they did not require use of an app for the account to be accessed online through the web, but this turned out not to be true. The reason for this criterion is simply that I don't wish to use my smartphone for anything money-related. To be clearer: I'm happy to receive security codes on the smartphone while setting up the account, but what I wish to avoid is having to install an app, and having to use the smartphone to access the account.)

5. Fast to open, preferably within 2 or 3 days.

6. Not Lloyds. (This bank has messed me about so much that I don't want the account to be with them.) Probably not another high street bank either, because I suspect Lloyds isn't particularly egregious.

7. Preferably a bank that a lot of other Ebay (or Amazon) small-business sellers use.

Thanks in advance for any help with this!

[btr.style]

1) You don't have to get a specific business bank account. Use your private one or if you want to keep it separate you can just have another private account. Some perks happen with business accounts but it's not a legal requirement to have one when running a business. 

2) you've written off several of the best already with Monzo and I believe starling being app only. Unfortunately apps are the way banks are going with it being way more secure than browser based access. 

3) pretty much all mainstream banks are FSCS protected. If you've heard of it, it probably is and will show that on their website. 

4) with saying you don't want to use another high street bank, that will almost certainly mean you'll have to use an app to manage your account. 

5) It really doesn't matter what bank you use. As long as they are FSCS protected, all are the same really. Some may have added perks like cashback, ability to create pots, but the basic functions are all the same. 

If anything I'd say you are wasting your money paying to have a business bank account to sell a few books on Amazon and eBay especially when turnover would be quite low. Unless these books are some sort of first editions or collectibles, the book market is flooded and just like with DVD's, it can be hard to give them away, let alone sell them for enough profit to justify further expenses with a business bank account.  

[neil-h]

Thank you for this.

So you don't know of any accounts that meet the criteria?

[neil-h]

In particular, not having to install an app, but being able to have web access, i.e. criterion 4, is a requirement.

[btr.style]

What criteria is this? All I'm seeing is no high street banks, no app only and yet nust be fast to open (near enough impossible because if going through web page banking only you'd have to have codes sent in post to verify yourself and with some require ID). So pretty much every bank has been written off with that criteria.  

Good write ups? Banks with good reviews are all app based (such as Monzo or starling). Other banks are high street that you don't want (reviews are typically mixed). 

Absolutely based on your criteria there simply isn't a web page based bank out there that has great reviews, can be opened in 2 days and isn't a high street bank. 

[neil-h]

I meant all the criteria taken together, but no app installation (4) is the key criterion I'm focusing on because so many accounts fail this one. So a list of accounts that meet criterion 4 would narrow down the field a lot, by the sound of it.

A high street company could possibly be acceptable if this is required to avoid an app.

There's no problem with codes sent by post, or ID, because I am legitimate. Receiving codes by text message is also OK. If it has to take a week, I guess that would be all right too, so perhaps I should remove criterion 5. I was just aware that the Co-op can open an account in 2-3 days, so I thought other banks might be able to act similarly fast. It was unfortunate that the Co-op misled me regarding their app. But taking e.g. four weeks would be ridiculous, given that I have  a whole print run of books sitting in boxes waiting to be sold.

Web access with no app is the big thing.

[handstitcheruk]

Is it just that you don't want to use an app on your phone because it leaves the house and you are worried about it being lost or stolen?  Do you have access to a tablet at home where you could use an app to log into a website?  If so, you might consider Starling - you can do it all on the website but to log in, you use the app - you get an in-app notification then scan the QR code on your computer screen.  You could do everything else you wanted to on the website (apart from pay in cheques although I think you can post them and contacting customer services although you can use live chat on the website - customer service is good and knowledgeable).  The app requires you to log into your phone (assuming that you do that anyway), log into the app (including when you log into the website) and if you want to do anything such as amending or setting up a payment, enter your password as well.  The app is really, really good though - very user-friendly and intuitive - it just works (unlike some I could mention).

I use Starling as a sole trader - I have the business package so I can submit to HMRC for Making Tax Digital.  I have previously used HSBC (okay but closed my branch without notice) and Co-Op but its website was a nightmare.  

Do check whether you can use any personal account for business purposes in the small print - not too much of a problem as a sole trader usually but might be for some banks.

[neil-h]

Hi. I have access to the web through many routes, including my laptop and my smartphone. (I don't own a tablet.) When logging into a bank's website, I am perfectly happy to receive a text message, which would probably be on a phone I have that is mobile but not smart, and then to type in the number contained in the text message. (I rarely use my smartphone - I detest the things - and never for anything money-related.) What I am unwilling to do is permit a program to be installed on any of my equipment purely for the purpose of logging in to a website.

Starling require app installation I think. They sent me an email which seemed to suggest this, although the person who wrote it suggested that being online-only logically implies that an app is required, so I have requested clarification.

I'm going to try Santander tomorrow (they are only opening business accounts - at least of the types I've looked at - for those who hold personal accounts, but this is OK because I already have a personal account with them) and also Virgin, although it wouldn't surprise me if Virgin are app-only given how they are positioned in the market. But I will find out 🙂

[handstitcheruk]

The best thing about a banking app is the instant notifications you get should there be any (un)authorised activity on your account.  Honestly, they are not all bad.  And I don't use social media or any kind of technology I don't have to - although I have the ebay app, I never use it other than to see notifications and find it utterly useless.  I was very dubious about banking on my phone and using an app - any app - but Starling just works well.  I have a relatively old iphone and I can see from the Appstore that there are 481k ratings for the app - almost all are 5*.  I can't speak for any of the other banks.

[eastern-lights]

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@btr.style wrote:

1) You don't have to get a specific business bank account. Use your private one or if you want to keep it separate you can just have another private account. Some perks happen with business accounts but it's not a legal requirement to have one when running a business. 

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Not sure that's true. It may not be a legal requirement to have a business account but I have a feeling that the terms and conditions of most private accounts may preclude their use for business.

It is also generally recommended to have a separate account for your business so that private and business transactions do not get confused. HMRC advise it. I suspect any accountant will advise it.

[neil-h]

Business use is against Paypal's T&C for a personal account too. Paypal can cause problems for no good reason, and in the event of any kind of an argument I would not want to be in the position of using a personal account with them for business purposes.

For a sole trader operating on a small scale it's not a legal requirement to keep personal and business stuff separate, because it's all taxed the same, but yes, as you say, it's recommended  - and a good idea too, so you can keep track of how well or badly the business operation is going.

[bzmotman]

Reading your criteria there is one missing that it is very important. Is it acceptable to Ebay under Managed Payments. I havent looked into the current position but when MP launched there were numerous tales of some banks or similar being rejected by Ebay. For example the situation regarding Wise [formerly Transfer wise] - I personally had it rejected on my business account but accepted on the private account.

If you live in the South East then you might have a Metro Bank near you. As with all banks if you really want a Business account then you need check before you start the process what their requirements are to open an account but if you want to use a personal account to start with them they are pretty good. As another poster has pointed out the market for books is not strong so you might be better testing the water to start with. Yours may be specialised & valuable but some Charity shops are selling books for a pound or two.

Assuming you are accepted by Metro then you should get your debit card on the spot plus cheque book etc. One downside is that they do not have any agreements with the Post Office so you are unable draw cash through that route.

Not a requirement to use the app but it is available. I understand where you are coming from on the app as I rarely use banking apps but one good reason to have them is that with some/all? you can stop your debit card instantly if it is stolen/lost.

Disclaimer - other than as a customer I have no connection with Metro.

[4_bathrooms]

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@neil-h wrote:

For a sole trader operating on a small scale it's not a legal requirement to keep personal and business stuff separate, because it's all taxed the same

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It's not a legal requirement but it has nothing to do with tax. For example, you'll likely pay income tax on your business sales but you don't pay income tax on any private sales. Keeping them separate will make your record-keeping much easier.

Most banks don't allow personal accounts to be used for business purposes. If the bank sees regular income that clearly isn't from a PAYE wage or the DWP they'll usually insist you open a business account or query where the income is coming from due to their obligations under the money laundering regulations. Anyway, here (PDF file) is a list of banks registered in the UK that the PRU currently regulates; you may want to print it out, do some research on each and cross out the ones that don't meet your criteria. 

Multi-factor authentication is now pretty much required for accessing any bank's online account services. A PIN code sent via SMS is often the least secure method (fingerprint and facial recognition are much more secure). Even if you hide SMS notifications from your device's lock screen anyone who has physical access to your debit card and your SIM card has everything they need to rinse your account.

[4_bathrooms]

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@bzmotman wrote:

Reading your criteria there is one missing that it is very important. Is it acceptable to Ebay under Managed Payments. I havent looked into the current position but when MP launched there were numerous tales of some banks or similar being rejected by Ebay.

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The bank must be registered in the UK. For example, Revolut does not have a banking licence to operate anywhere in the UK (only in the EEA) so can't be used.

[jow1995]

Best bet before opening a buisness account is see how many items  you sell and profit made

its very diffucult to start a buisness from scratch on ebay , you ill be competing with experienced sellers who have been plying their trade for many years. 

Good luck trying

[myriad*seller]

Mettle offer free business banking for sole traders and free accounting software as part of the package

No fees whatsoever. I have been using them for a few years with no complaints 

[keeptheroof]

Having had many businesses and many bank accounts I can advise the only bank worth having is the one that gives you the longest period of free banking or the one with the lowest fees. They are all crooks only outdone by the average politician.