1st Group, Bow Court, Coventry, CV5 6SP Tel: +44 (0) 2476 691757 Fax: +44 (0) 2476 997 350 New Enquiries Tel: 0800 089 0110 Email: [email protected] Email: [email protected]
1st Financial Consultants Limited
Authorised and Regulated by the Financial Conduct Authority Registered Office: 1st Group, Bow Court, Coventry, CV5 6SP
Registered in England No: 03186438 Business Banking Guide
Operating and supplying services via a Limited Company brings with it the need to open a business bank account. This is simply because the Limited Company is a separate legal entity, and will be entering into contracts with either Hirers or Recruitment Businesses. In turn those Hirers or Recruitment Businesses will make payments, usually in response to an invoice, and those payments need to be paid into the company account.
As part of our on-going business support, our Financial Team periodically review the open market to identify bank accounts that may be suitable for use by Limited Companies. The key features that we look for in banking accounts are detailed below and our recommendations do change from time-to-time. We are pleased to recommend Metro Bank Business Start Up Account as a suitable account for the business banking requirements for Limited Companies.
The key features of the account are as follows: – • Very quick opening turnaround times; • A debit card and cheque-book facility; • Free Online Banking;
• Reasonable interest on current balances (assuming base rates rise); • The delegation of opening account responsibilities, from the bank, to us; • Fee free transactions; and
• No opening deposit. Bank Balances
In a typical business bank account we find that the Directors of Limited Companies retain significant funds in their business. This can be for a number of reasons including: –
• No need to draw the money from the business at that time;
• A desire to build up the cash reserves should there be a break in contracts; • A desire to defer tax;
• A desire to build up funds in the business, to use as part of retirement planning; or
• A desire to build up funds for later extraction using a concession such as ‘entrepreneur’s relief’. Consequently, banks are keen to attract business from professional Freelance Consultants and Interim Managers because having funds on deposit means that the banks can, in turn, make funds available to borrowers, and this is where banks make most of their profits.
Bank Charges
Most of the high street banks now offer free business banking for a set period. We sometimes find that when talking to Customers, they tell us that they intend to use the local or personal bankers for the first 12 months, and they will then change once bank charges start. The reality is that Clients very rarely change their bankers because of the hassle. We therefore recommend that banking decisions are made with charges considered both in the short term and in the longer term.
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Metro Bank offer free banking for an initial 12 months providing transactions remain under 200 per month. The account is then free on an ongoing basis provided the account maintains a £2000 balance, which we find most clients easily achieve with their accrued VAT & Corporation Tax reserves after the first year of trading.
It is actually quite difficult for a Limited Company that supplies the services of one or two professional Consultants or Interim Managers to exceed the 200 transaction limit. We would consider the below as typical transactions: –
• Five credits in response to weekly invoices; • Two salary payments;
• One PAYE payment; • Two expense payments; • Two pension direct debits; • One accountancy direct debit; • Two mobile phone direct debits; • One quarterly VAT payment;
• One Internet transaction for a computer purchase; • An annual corporation tax payment;
• A one off payment; and • Two dividend payments.
You will clearly see that even taking into account the maximum possible scenarios we are still significantly lower than the 200 transactions. Therefore the Metro Bank account, from the charges perspective, is a very worthwhile consideration.
Internet Banking
The Metro Bank business account offers free Internet banking. The Internet application form will form part of the initial application pack; Internet banking enables you to access your facilities provided you have access to the Web, anywhere in the World. You will also be able to make payments and view records electronically.
1st Portal
The Metro Bank Internet banking facility is very complimentary to clients who use 1st Option’s unique 1st Portal; you will have access to all accounting records via the Portal and access to all bank transactions with internet banking meaning 24/7 access to your business at all times.
Speed of Opening
Most high street banks require a full application pack, an interview, and the presentation of anti-money laundering documentation/identification. The Metro Bank account does not require a personal visit by you, nor does it require an interview. We, at 1st Financial Consultants Limited, are able to verify your identification under the license that we hold with the Financial Conduct Authority. We are therefore able to submit your application quickly, and we are currently experiencing a business banking turnaround of five working days. The delivery time does vary from time-to-time, and we will tell you if it changes significantly at the time you make your application.
3 Interest Rates
Business bank accounts across the UK are not currently yielding much by way of interest. This is reflective of very low Bank of England base rates. We do expect to see this return once base rates start rising again.
Multi-Currency
The account can transact in a number of different currencies including Sterling, Euro or US dollar. Commission
In return for processing the application and meeting the anti-money laundering obligations Metro Bank will pay us a commission of 0.25% on each bank account balance. This means that if you were to retain an average of £2,000 in your business account over the period of one year, we would receive a commission of £5.00.
Metro Bank
Metro Bank's commitment to unparalleled levels of service and convenience extends to the way they think about Commercial Banking. By being open 7 days a week, 362 days a year, early and late, they offer unique advantages and expertise to serve your commercial banking needs. The bank is also part of the UK Ombudsman's Scheme, and part of the Financial Services Compensation Scheme. More information can be found here.
Disclaimer
This document should NOT be seen as individual investment advice. The document provides generic information covering the banking options for owners of a Limited Company. Those Owners, or the Directors that they appoint, should conduct their own research on the most appropriate business banking, and they should seek advice from an expert or Independent Financial Adviser if they have any doubts.
Personal or Business investment advice is available on a consultative basis from 1st Financial Consultants Limited. If you would like us to undertake such advice please email [email protected]
Fact Sheet
For full details and terms and conditions, together with the key features of the account please click
here.
We wish you every success with your new business. Regards,
