Business account for additional income (Rental)

I have rental income from a property however I’m also full time employed. I don’t have a business set up or anything, no LTD or sole tradership etc. I’ve been wanting to seperate my rental income from my personal to make things easier to manage and was waiting for Monzo business. From their offerings it seems to be that I cannot apply for this yet as they do not support this sort of account. Is this true? can someone help clarify this for me please?

Hi,

If you’re not actually trading as a business (e.g Gramzon T/A Gramzon Properties) then you don’t really need a business bank account. If you’re just looking for a way to keep you rental income separate from your other income, then opening another personal bank account to be dedicated to rental payments seems like the best option.

Having said that, your industry isn’t on Monzo’s list of excluded business types, so you could always put in an application and see what happens. The business accounts are really designed for limited companies or sole traders operating as a business, for example John Doe T/A Sparkling Window Cleaners.

Hope that helps!

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Does monzo allow a second personal account that you know of?

Not that I know of. I’ve seen people requesting it on the forum before and the answer was no. You’d have to open an account with another bank or one of the other new mobiles banks (Starling etc.)

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Monzo does not permit more than one personal account. I know this.

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Not being able to open a second account is a bummer, I waited for the business account to use for this purpose but it seems like I won’t be able to.

Bizarrely I was able to apply and open a sole trader account but I’m not actually registered as a sole trader, so I think this account maybe closed by Monzo as I remember it saying that they check sole traders to some kind of online register?

What makes you say you’re not a sole trader? If you receive rental income, then you must have to fill in a self-assessment tax return.

There’s no official register of sole traders like there is with limited companies. If you’re selling a product of service on your own (property rental in your case), then you’re a sole trader.

If you’ve already managed to open a sole trader business account with Monzo then I think you’ll be fine!

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Ah right great, my uncertainty comes from the lack of knowledge lol. I’m still very new to this, I’m filing my first tax return this year via my accountant.

No problem! Everyone has to learn.

I’m 99% sure you’ll be absolutely fine. The only problem I can see is that Monzo don’t currently allow business accounts for investment income, but I’m pretty sure that means share dealing etc. I don’t think renting out properties would be classed as an investment income business.

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I think you’re right, I also don’t believe this is an investment type income but thank you for your help. Feel a bit more confident with the account, hoping to switch all my direct debits to it soon :joy:

Yep, pretty sure you’ll be fine.

If you ever need to clarify anything, start a live chat with the Monzo team. They’re a pretty helpful bunch.

Good luck!

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Did that as well :joy:. They said they can’t give me advice on what type of account I require but that it sounds like I need a business account. Which is fair enough.

I would say you’re a prime case for a business account.

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It would seem that the business lite with no fees would be the one that suits you as long as you aren’t receiving your rental income in cash it should be absolutely no problem to open it, and it then keeps all your rental income and expenses separate from your personal current account, its a clean and simple solution for both you, your accountant and the taxman, and… its free! - perhaps the advice the cops couldn’t give you was to do with which business account (miss-selling ? ) - Business Lite or Business Pro

Cheers, that’s the one I’ve gone for. Not worth paying fees at the moment for me as I don’t make a huge amount from it.

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If you have any questions let me know - we have had a rental property for three years now and I am also a sole trader.

I use the free Monzo business account for my self-employed income and my personal account for my rental income (and outgoings) and my joint account with my husband for all our household finances. It’s not the only way to do it, but it works for us :blush:

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Ah great thank you, does it make a difference if an estate agency is managing the property? I wouldn’t think so but wanted to check.

I can’t see why it would.

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