Help with a banking question

[Indivijewelistic]

Hi everyone, I have decided to join the Federation of Small Businesses and use the free co-op banking. However, I am looking at a shop that is directly opposite a Barclays Bank (who I don't want to use because they are too expensive).

I have had a personal Barclays Account for c. 15 years - is there anything to stop me, legally, paying in some cash into my personal Barclays Account and transfering it using the online banking system of Barclays and Co-op?
and what is the worst the could happen when Barclays find out I am doing this, as Indivijewelistic is a Limited Company.

For security I would like to use the bank directly opposite to the job, so that I am not carrying cash long distances, but then I don't want the financial weight of the Barclays account on the business in the first years.

Any help or idea appreicated.

Thanks
Trish

 

[akirk]

In the past you used to be able to put in money destined for any bank / account you liked, through the counter of any other bank - not sure whether that is still the case - if it is, you can put in coop account monies directly in through Barclays - may be worth asking...

Alasdair

 

[danielmeade]

I wouldn't quote me on this but I'm almost certain that there is nothing wrong with doing things that way other then the complications and inconveniences you may get personally your end.

Ask to speak with a Barclays business manager, they can offer your business a free account for 18months plus have a ton of extra features which you wouldn't otherwise get with some of the other high street banks. I personally use Barclays for both personal and business accounts and have never had a problem.

Although you may incur bank charges sooner, you may find it to just be a minor convenience fee that is worthwhile for your business.

 

[What If]

It will depend upon the value/amount of transaction, but they will figure it out eventually. When your banks find out you aren't using the accounts in accordance with their T&C's they could shut your accounts down. That will be a much greater inconvenience to your business than simply travelling to the co-op or paying barclays charges.(Anyway, don't barclays offer free business banking for new/transferring businesses.)

Also if you are a Ltd company that money isn't yours! It could get very unconfortable if you get an inspection from the tax man and have to explain that you're not laundering money but are simply trying to avoid Barclays business rates!

 

[ACDS]

What you are suggesting is running your business through your personal account to avoid bank charges. Barclays will notice as the volume of activity through your personal account will change and they would probably then ask you to close the personal account or at the very least cease to pay in. Suggest you speak to Barclays and ask them to match the free terms being offered elsewhere. Banking cash is the most expensive item in bank charges. All banks offer some element of free banking for new businesses. As a Limited Company if the company borrows then it will probably mean that you have to give a debenture over the company assets in which case you can only have one bank account and all receipts must go through the account.

 

[Indivijewelistic]

Thanks to everybody for their advice. I am off to Barclays to haggle for a free bank account. They originally advised that the 18 months free banking would cost £18.50 a month (so I thought - hardly free then is it). However, given that I would probably buy quick books anyway, it might be worth it.

 

[Rainbow Chasers']

Barclays will give you a year of free banking thereafter (£28/month plus transaction costs), a business manager that may be older than 16, and be well versed 'in theory' if you are lucky. They are getting a little disorganised of late - i have noticed a few mess-ups lately that have caused me no end of embarrassment - like bacs transfers not going through because the clerk 'forgot' or 'didn't know how to do it, so put the money back in' All well and good until you get a disgruntled supplier on the phone saying you haven't paid - and you saying you have, only to investigate and look a fool.

I have 8 complaints going through their system for the past 4 years, accounting for 11k worth of mistakes they have made and want me to pay for!

Co-op banking is free - if there isn't a co-op bank in your town, you use the post office in exactly the same way. You just need to get in a habit of banking when you send your mail off, and you will be fine!

 

[Indivijewelistic]

exactly the same as you guys. It is not illegal to do it, but it is cheating the bank out of their funds and as such they will frown on it. Obviously, if you then ask to lend some money later in the life of the company the bank will look poorly on the way the account has been handled.

There wasn't much in the way of haggling to be done over the price of the account per month if you want Quick Books Pro, the free tuition on using it and the Google Ad words etc., but I hope there might be a deal on overdraft facility etc.

The do a completely free bank account but it is only for 1 year.

All in all I was pretty sold on them, particularly as the guy in the Enfield Town Branch was really nice and really seemed to know his stuff.

Thanks for everyones help and advice, much appreicated.