Will Monzo offer competitive business banking?
No. Monzo will not be offering business banking.
They suggest you look at alternatives such as Tide
At least not initially as I understand it.
Here’s Tom’s confirmation that Monzo won’t offer business banking -
It does look like Monzo is open to helping users manage their expenses, an example of a really good development of the existing functionality is here -
However, in the last week Tom has promoted a startup call Coconut the “bank account for freelancers” which looks like it’s providing the types of services that the entrepreneurs who have shown an interest in Monzo were looking for -
although he might just be grateful that they changed their name from Monizo, rather than making a trademark claim against Monzo…
Here’s a link to Tide’s website https://www.tide.co/. It’s worth mentioning that they’re backed by the same investors (Passion Capital), as Monzo.
Depends what you actually need, I suppose. Sole traders can probably get away with any separate account for their business, rather than a fully fledged business account.
But Coconut will automatically calculate your tax position so you know what your tax payments are, Tide do invoices for your business, etc. Things that are not planned by Monzo
Nice enough for those that want it, but I don’t need or want my bank account to try to calculate my tax position and I prefer to control my own invoices. I’m sure I’m not alone. In which case a ‘normal’ account is just fine. That’s all I’m saying.
Not sure how strict the new T&Cs will be for the current account. Some banks close the personal accounts of the self-employed or freelance when they notice it is being used for business use. Those working on contract long term to one client tend to get away with it more than those working for multiple clients or changing regularly between short term contracts. Maybe Monzo won’t be as strict
It would be good to get clarification from Monzo if they will allow ‘business activity’ on their personal account. Think dance teacher or tutor needing somewhere to pay in their earnings, or freelancer with minimal transactions. In these cases of sole traders, the burden on Monzo is unlikely to be any higher than that of basic personal transactions.
Most banks are ‘mad-crazy’ strict on it. Barclays even said a part-time babysitter would require a business account. Get real. Oddly Nationwide has expressly said that examples similar to those I mentioned above are perfectly fine, and don’t breach there ‘Not for business use’ terms.
Coconut is designed for such self-employed sole traders and contractors, Tide for small limited companies. Monzo and Tom have always said these companies should be used for such business banking and that Monzo does not intend to be used for business use.
Mozo is a personal account so yes I accept that it doesn’t intend to be used for business use (whatever that term actually means - it’s open to interpretation)
I’m wondering what Monzo’s stance is on the matter. Sure they would prefer all their users to employed, but are they going include strict terms and conditions, and start closing accounts if a babystitter, or guitar teacher etc… starts payment money they earn into the account.
This comment from Tom in Feb 16 suggests Monzo will not be mad crazy strict on this (afterall, they have no need to channel sole traders into a business banking offer):
"We don’t plan to offer full business accounts because the requirements are so dramatically different. Multi-user access controls, card acquiring, accounting, invoicing, etc, etc
Sole-traders and freelancers are probably close enough to a personal current account that Mondo would work for those cases."
So it seems depends what you are looking for. If you need the integration into accounts etc, then look elsewhere (there are posts that can help on this). But if you just need to keep eg your freelancing transactions separate from personal ones, then it looks like Monzo would be happy if you are happy to use Monzo.
It really depends, if it’s the case you are paying cash you receive or transferring payment for freelance services from another bank account into your Monzo account for example, there isn’t really a problem.
However if you are soliciting payment using your Monzo.me link and receiving money directly from clients into your account in this way, this doesn’t fall under the definition of ‘personal use’ and isn’t included in an agreement with us to provide you with an account for personal use.
I was really thinking ahead to when the full current a/c comes along. If I give my employer(s) my Monzo a/c details, they should be able to pay my wages and any expenses they owe me as a BACS transfer (ludicrous for it to be otherwise). So if I work for them on a self employed basis, presumably they could do the same? If that is not the case, then I find it hard to reconcile Tom’s comment about freelancers/sole traders’ needs being pretty close to a personal account.
Here is the alleged Nationwide comment that they are okay with the above:
Payment via BACS from an employer won’t be a problem As I mentioned, receiving payments via Monzo.me regularly is a more specifically problematic area. Generally, the nature of the job which someone would collect payments using Monzo.me would be different as the maximum amount you can pay in one transfer is £100.
I think when you are self-employed but working solely for one client and receiving your regular monthly wage most banks regard that as being in effect the same as a permanent PAYE salaried job, it is when you are working for multiple clients and issuing invoices for services provided and charging them VAT then it tends to be seen as inappropriate for personal accounts
Yes, a lot of banks turn a blind eye to it.
Nationwide are the only ones to specifically say it’s fine - their twitter team anyway.
I agree. If you at the VAT threshold or pay VAT then it’s inappropriate.
Most freelancers or contractors will want their own business account anyway, that’s where Tide, Coconut etc… come in, but they’ll be a few who do one-off jobs every now and again that will just want to use their personal account.
Hi, I’m after a service currently no banks offer, yet I know of a many people who would be interested.
I’m a sole trader, and due to my business, the amount of money and when I receive payments into my account varies greatly. What I am after (and my peers too) is a service that detects when money is paid into the account, and immediately takes 20% of that figure and transfers it to another account. That way at the end of the tax year I’ll alway have enough money for HMRC. Is this something Monzo would be able to implement?
I’ve moved your post here, as there’s some useful discussion about whether Monzo will offer business banking solutions earlier in the thread, I hope that helps
I’d recommend checking out the other providers that’ve been mentioned, as unfortunately Monzo can only be awesome at so many things at once & so they’re more likely to offer a service that covers all of your needs.