Is it a legal requirement to have a business account for rent collection..

[Brixtonia]

Just had a call from Lloyds TSB who told me that new laws make it illegal for me to use a normal current account for business and that I should change my account to a business one.

I have two accounts at Lloyds - one I use for my personal banking and the other is used to collect rent from seven investment properties so as to make the income transparent. I have had this setup on and off for about 10 years.

My business banking (both ltd company and personal name) is with another bank who finance my developments.

The lady who phoned me was unable to answer many questions (including what the difference was between a business account and a non business account) but my guess is that LLoyds simply wants to charge me for my receipts.

Anyone else experienced this or known anything?

[jeffrey]

No, it's not a requirement of law. As long as the funds arrive in an account in L's name, that's enough. On the other hand, Banks seek to treat business customers differently (esp. re fees!)- hence its wish to move business items to a new account.

Ask Lloyds Banking Group about its fees structure. For a small business, HSBC offers free banking. I'm favourably impressed with its service and website.
However, I've had bad experiences with both Alliance and Leicester Commercial Bank and Abbey National Business Banking (oddly, both now part of Santander UK plc), so I'd not recommend either of these.

[Brixtonia]

Thanks for the tip. I will give HSBC a call. I think I may even have an account with them sitting dormant.

Lloyds just rang me again and said that the rules clearly state that I cannot have income from more than 3 properties into a private account - but then they weren't sure where these rules were clearly stated or indeed whose rules they were.

They have offered 1.5yrs free banking so not a hurry but I think it is time to move on from the old black horse. Too archaic!

[jeffrey]

For HSBC's website, start at https://www.business.hsbc.co.uk/1/2/home;jsessionid=0000zfNRZ16cJLQ_Gk820jqt0Me:140fip p4n