Business banking for landlords?

Business banking for landlords?

13:58 PM, 19th June 2014, About 7 years ago 22

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Wanted to pick your brains on business banking. 

I have 5 properties, one I live in and the other four let out.

My accountant has advised me to open a business bank account. Is this the right way forward?

I guess it may depend on strategy, mine is to hold the property’s long-term. Business banking for landlords

I guess business banking is just another monthly cost when you can use personal bank accounts for the same exercise, but for tax purposes I want to do the right thing.

Which business banking do you use?

Is there a specialist one for property management or would an online business bank do the job?

Thoughts please,

Many thanks in advance.



by Mark Alexander

18:23 PM, 19th June 2014, About 7 years ago

Reply to the comment left by "Paul Still" at "19/06/2014 - 18:19":

OK but cost isn't always a good basis for comparison, take two restaurants, both selling burgers, one with a Michelin star, the other with a big sign with a golden M on a red background. We all know which one the grown ups prefer 🙂

by DC

18:29 PM, 19th June 2014, About 7 years ago

I agree with everything that Mark and others have said and do recommend that you change accountants.

Mark's costs sound quite expensive but as he says, he probably gets what he pays for, and no doubt has far more properties and complications to trawl through than I will ever ask my accountant to deal with!

Perhaps if you seek other landlords advice on accountants local to you it will give you an idea of their costs.

by Marcus

18:37 PM, 19th June 2014, About 7 years ago

Point taken..

by Rob

19:34 PM, 19th June 2014, About 7 years ago

Company or no company I believe is down to weather your a 20% tax payer or a 40% tax payer if your 20% keep the properties in your own name if your a 40% tax payer then a company would be better! but everyone is different and depends on a lot of other factors. For comparison my accountant charges £50 pa per property plus vat , plus it's paid monthly in advance so no big accountants bill at the end of the year!

by Adam Hosker

19:56 PM, 19th June 2014, About 7 years ago

I'd say dont shrug off your accountants opinion, [copy "Rob" comment here]. You need to ask him why a company formation will ease your tax or inheritance burdens.

As for bank accounts; yes separate them. Its easier to keep tabs so if its a (trading as) business account with a years free banking from HSBC OR opening a 2nd personal account.

If it comes to a rental dispute; you need to provide evidence to the court a clear rent account can be shown to the judge. A confusing personal account mixed in with multitude of direct debits and visa payments is not clear and anything you submit is made available to a tenant.

HMRC comes knocking you can show them a clear rent account, or when it comes to tax;s your accountant can see a clear statement of affairs.

You can also lease the property to a LTD Liability company, who rents it out to a tenant. This is Limited Liability so any unsuspecting claims such as tenant tripping up on a carpet when playing xbox (happened to our landlord) you can LIMIT your liability but furthermore any court agreement will take into account that Co's income/expenditure and not your own.

New business: comes down to your income and tax advantages. Needs advice.
Separate account: comes down to keeping it simple and organised. I'd suggest.

If your skeptical on your accountant; others can advise of an experienced lettings accountant. I use HKS Accountancy in Leeds and are great, others such as Residential Landlord Association suggest Rita4Rent.

by Mick Roberts

7:27 AM, 20th June 2014, About 7 years ago

Mark, you are so much like me.
You may deal in the upper end properties, I may deal in the lower end.

But we think so alike-And some other landlords by the looks it. I do have a business account as well, but keep stuff going into there at an absolute minimum cause as u say ‘costs’.

Costs me £5 a month with only 6 mortgages going out that one-Despicable. So I keep most of my stuff in other ‘personal’ account.

Business accounts are good if u want to present professional image ie’ be able to take cheques in the company name or the name of the company you want to call yourself.

Oh & Mark, we are alike, but let’s remember-I’m 10 years younger than u ha ha. Alpecin Shampoo by the way-Brilliant.

by Mark Alexander

7:34 AM, 20th June 2014, About 7 years ago

Reply to the comment left by "Mick Roberts" at "20/06/2014 - 07:27":

Cheers Mick, are you really 10 years younger than me by the way? You don't look it! LOL

by Mick Roberts

7:41 AM, 20th June 2014, About 7 years ago

Of course, I've been 32 for 14 years.

I'm gonna' need some advice for business banking soon, & will post on here when time is right. But basically, I'm gonna 'be taking on someone 'like a letting agent' & want him to be able to see my 'rents in' in the bank to see which ones have come in & not come in, but I don't want the worker to able to do anything else within the bank.

ie. Log in the bank to view, but not able to move any money about at his pleasure.

Or maybe pay small amounts to builders but limit on the total amount ie. nothing above £1000.

by Mark Alexander

8:06 AM, 20th June 2014, About 7 years ago

Reply to the comment left by "Mick Roberts" at "20/06/2014 - 07:41":

Hi Mick

I have an online business banking service for one of my non-property related businesses which allows employees to access bank details and to schedule payments. I then get a notification to say that I need to approve or decline the payments.

This is with Coutts & Co but as they are part of the same group as Nat West and RBS I suspect they will have something very similar.

By the way, I'm happy to settle for 32 as we're both the same age in reality. The only give-away being my 22 year old daughter LOL

by Mick Roberts

17:59 PM, 20th June 2014, About 7 years ago

Reply to the comment left by "Mark Alexander" at "20/06/2014 - 08:06":

Told u, u was older than me. My daughter 20. Although I may have a couple of 28 year old twin lads out there somewhere.

That is brilliant, that would suit me down to the ground. So he could set payment up, but I would get the text first & if I don't like the sound of it, I can leave it till I get back to the office to check?

Is there more to tell either on this forum or privately?

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