I’ve been pulled up by Starling for using my personal account for rental property income and rental property expense payments.
They’re saying I need a business account or basically if I carry on they’ll close my personal account, which I thought was somewhat drastic!
I guess technically speaking they’re right, although in some ways it’s not much different to receiving other investment income so I never considered it before. I don’t have a limited company or anything like that, and a managing agent does all the actual work just passes on the rent. Usually expenses/maintenance etc are paid out of the rent, although in the last few years or so I had to do a bunch of refurb work for energy efficiency so have had to pay over and beyond the rental income. Maybe they have looked at that and decided it’s operating more like a business, I don’t know. They aren’t very forthcoming about it, actually.
I am curious whether Monzo takes the same stance? I have a Monzo account but it’s just sitting there as a back-up for my Starling account; I opened them both roughly the same time and Starling just became the main one.
It wouldn’t be the end of the World to have a separate account, but I’ve never felt the need before and I don’t really see the point.
Thanks folks. I guess a business account is the way to go. Oddly enough to resolve this I tried opening a sole-trader account with Starling but got rejected! They wouldn’t give a reason. It was the simplest application imaginable, just chose the Property/Landlord category etc filled in the details. But no dice, and frustratingly, no reason.
With the above and being unable to open a Starling teen account for my 16-year because they insist on a proof of address which we don’t have for her (she subsequently has opened a teen account with Monzo using just her passport) I’m kind of beginning to lose patience with them.
Renting out houses doesn’t count as a business with HMRC. I do the same and would have been thinking of opening a business account with Starling if/when this happens to me. Sounds like I’ll have to rethink that plan.
Looked at Mettle and I don’t think they’d be a runner either. Basically the issue is that being a landlord doesn’t count as being self-employed and it looks like that’s blocking you with Starling and potentially elsewhere too.
You can use a Mettle account for this purpose - if you’re renting out a property as an individual landlord, you can effectively consider yourself a “sole trader”
For @oviano it’s common for small scale individual landlords to use personal accounts for property rental income. You don’t need a business account per se, though I suspect Starling currently have £29m reasons for not wanting such transactions at the moment.
I would always suggest a different personal bank account for property income/expenses instead of using your main one though. It just makes tax returns that much easier!
In my experience, big high Street banks like HSBC and NatWest wouldn’t worry about these kind of transactions occurring in personal accounts
I just give the rental statements produced by the managing agent to my accountant for tax returns so I’ve never had to send or look at the bank statements.
Anyway, I have managed to open a Monzo Sole Trader account so I’ll use that from now on. Maybe I’ll use Monzo as my current account too, not sure yet, I kind of like having it all in one place/app and since Starling seem unwilling to accommodate me…
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tbutz
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If you open a Monzo Business account as a sole trader, is it necessary to provide a “trading as” name, or does it remain in your own personal name?
For the trading name I just put my own name followed by (Property).
I don’t think the name of the account really matters, I don’t even think there is an official way to register sole trader names in any case, so where would it even be used outside of the bank account?