refused a business bank account
Discussion
Simpo Two said:
If she is retired and only taking 'occasional payments' why the need for a limited company? Now she has a business that can't accept money!
Some organisations want to use her services directly for one off's or short periods and don't want to set up PAYE (tax, NI, holiday pay etc) or use agencies.She just left for a meeting with the existing bank so we shall see what happens. Bearing in mind they clearly stated twice on the phone it is a bankruptcy, that does not show in public records, if nothing else we hope to find out what info they are using and where it is coming from.
Update:
After a bad start, no record of the appointment, she eventually managed to see the branch manager.
Absolutely no reason why she should be refused and he could not find the alleged info used by the business dept when he did his own checks. Going to investigate and knock on doors to see if he can find out what is going on. As personal and business are run as separate depts he will automatically initiate complaint procedure if he is unable to resolve by the end of next week.
Bizarre
After a bad start, no record of the appointment, she eventually managed to see the branch manager.
Absolutely no reason why she should be refused and he could not find the alleged info used by the business dept when he did his own checks. Going to investigate and knock on doors to see if he can find out what is going on. As personal and business are run as separate depts he will automatically initiate complaint procedure if he is unable to resolve by the end of next week.
Bizarre
mrpurple said:
Update:
After a bad start, no record of the appointment, she eventually managed to see the branch manager.
Absolutely no reason why she should be refused and he could not find the alleged info used by the business dept when he did his own checks. Going to investigate and knock on doors to see if he can find out what is going on. As personal and business are run as separate depts he will automatically initiate complaint procedure if he is unable to resolve by the end of next week.
Bizarre
Sounds like an ID mix up. Someone will be receiving some training.After a bad start, no record of the appointment, she eventually managed to see the branch manager.
Absolutely no reason why she should be refused and he could not find the alleged info used by the business dept when he did his own checks. Going to investigate and knock on doors to see if he can find out what is going on. As personal and business are run as separate depts he will automatically initiate complaint procedure if he is unable to resolve by the end of next week.
Bizarre
mrpurple said:
Mr Pointy said:
What happens when the accounts department at he client refuse to to this? They have engaged with mrspurple ltd, not mrspurple the person. They cannot change who gets paid for the work.
This.
Countdown said:
Why would she bother to bill them through the company? Just bill them with a personal invoice marked "Please make cheques payable to Mrs Purple" like sole traders and partnerships do. If it's only occasional / ad-hoc work I'm not sure why you've gone to the bother of setting up a Ltd Co. tbh.
A)Because a major international company asked her to as it was their preferred way of dealing with consultancies in her field of operations.B) Advised by accountant for tax purposes.
Countdown said:
mrpurple said:
Mr Pointy said:
What happens when the accounts department at he client refuse to to this? They have engaged with mrspurple ltd, not mrspurple the person. They cannot change who gets paid for the work.
This.2) It can be tax-efficient
3) You don't lose your house if you get sued
mrpurple said:
A)Because a major international company asked her to as it was their preferred way of dealing with consultancies in her field of operations.
B) Advised by accountant for tax purposes.
Tax purposes I can understand.B) Advised by accountant for tax purposes.
Reason (A) puzzles me somewhat. I'm curious from a professional point of view as to what benefits there would be for a multinational in dealing with a LTD Co. as opposed to a sole trader. For example up until quite recently the Big 6 / 5 / 4 were partnerships and even now they're LLPs.
As I say I'm just curious. One of my clients has a £400m turnover and I'm wondering if we're missing a trick by not insisting our suppliers are ltd companies.
Mr Pointy said:
Countdown said:
mrpurple said:
Mr Pointy said:
What happens when the accounts department at he client refuse to to this? They have engaged with mrspurple ltd, not mrspurple the person. They cannot change who gets paid for the work.
This.2) It can be tax-efficient
3) You don't lose your house if you get sued
Countdown said:
2 & 3 are for the benefit of the individual and I can understand that. It's no 1 I can't understand. We make numerous payments to individuals, and small firms which aren't ltd co. I'm not sure what benefit there would be to us in insisting we only deal with Ltd Co. I'd rather sue an individual than a corporate entity.
Pure guesswork so please take it as such.It is only her own labour she supplies but if the small, non Ltd Co's you use only work for you and nobody else could that not run the risk of you being seen as their employer by default?
Edited to add: also some specialist agencies have offered her far better rates if she works on a Ltd company basis.
Edited by mrpurple on Friday 22 August 18:58
Mr Pointy said:
1) Because the majority of client companies won't deal with sole traders these days
3) You don't lose your house if you get sued
Therein lies the paradox. The 'big company' is too frightened to work with sole traders so it trades instead only with Limited Companies. Which it cannot then sue if things go pear-shaped...3) You don't lose your house if you get sued
I've been a sole trader since 1991 and no blue-chip ever asked me to incorporate.
Simpo Two said:
Mr Pointy said:
1) Because the majority of client companies won't deal with sole traders these days
3) You don't lose your house if you get sued
Therein lies the paradox. The 'big company' is too frightened to work with sole traders so it trades instead only with Limited Companies. Which it cannot then sue if things go pear-shaped...3) You don't lose your house if you get sued
I've been a sole trader since 1991 and no blue-chip ever asked me to incorporate.
Countdown said:
Mr Pointy said:
Countdown said:
mrpurple said:
Mr Pointy said:
What happens when the accounts department at he client refuse to to this? They have engaged with mrspurple ltd, not mrspurple the person. They cannot change who gets paid for the work.
This.2) It can be tax-efficient
3) You don't lose your house if you get sued
The issue is not when everything is going right, but when it goes wrong. If HMRC investigate you or one of your suppliers & decide they are not acting as a self employed entity then the outcome is different if the supplier is a Sole Trader or a limited company. If it's a LtdCo (or a Partnership) then essentially they have an IR35 issue & they will be presented with a tax & NI bill, along with having claimable allowances severely curtailed. However you don't have an issue, nothing changes.
If they are a ST then you will be deemed liable for the maybe the tax but certainly the NI that is due as the person is deemed to be your employee. You can try & reclaim it from the ST but unless it's written into your contract with them they are not obliged to reimburse you. There is also the potential issue of holiday & sick pay which they may be entitled to if they are deemed to be employees. Obviously they would probably be unwise to go down this route, but it has been mentioned.
When it comes to "suing an individual rather than a corporate entity" I assume you do check (& frequently re-check) that all of your suppliers have the appropriate insurance eg Professional Indemnity & Third Party Liability? It's all very well saying you will sue a supplier but if their overall net worth is £20k (once the mortgage is paid off) & they do £100k of damage, or worse still injure someone while working for you, then it's likely the lawyers are going to come calling at your door. Of course we don't know what your business is so if your suppliers are outworkers knitting bobble hats this is unlikely to be an issue.
It's essentially a risk assessment issue for which you probably need professional advice relevant to your business & how it's run.
Simpo Two said:
Mr Pointy said:
1) Because the majority of client companies won't deal with sole traders these days
3) You don't lose your house if you get sued
Therein lies the paradox. The 'big company' is too frightened to work with sole traders so it trades instead only with Limited Companies. Which it cannot then sue if things go pear-shaped...3) You don't lose your house if you get sued
I've been a sole trader since 1991 and no blue-chip ever asked me to incorporate.
Of course the scale of the liability does depend what you are doing. If you are designing aircraft battery systems for Boeing the potential liability is quite high. If it's garden watering systems, not so much.
Mr Pointy said:
The issue is not when everything is going right, but when it goes wrong. If HMRC investigate you or one of your suppliers & decide they are not acting as a self employed entity then the outcome is different if the supplier is a Sole Trader or a limited company. If it's a LtdCo (or a Partnership) then essentially they have an IR35 issue & they will be presented with a tax & NI bill, along with having claimable allowances severely curtailed. However you don't have an issue, nothing changes.
If they are a ST then you will be deemed liable for the maybe the tax but certainly the NI that is due as the person is deemed to be your employee. You can try & reclaim it from the ST but unless it's written into your contract with them they are not obliged to reimburse you. There is also the potential issue of holiday & sick pay which they may be entitled to if they are deemed to be employees. Obviously they would probably be unwise to go down this route, but it has been mentioned.
We carry out the Employed vs. Self Employed checks for all Contractors providing services, regardless of whether they are ST or LtdCo. I'm not aware that paying a LtdCo (rather than a ST) absolves us from being lumbered with Ers NI issues if HMRC decide to investigate?If they are a ST then you will be deemed liable for the maybe the tax but certainly the NI that is due as the person is deemed to be your employee. You can try & reclaim it from the ST but unless it's written into your contract with them they are not obliged to reimburse you. There is also the potential issue of holiday & sick pay which they may be entitled to if they are deemed to be employees. Obviously they would probably be unwise to go down this route, but it has been mentioned.
Mr Pointy said:
When it comes to "suing an individual rather than a corporate entity" I assume you do check (& frequently re-check) that all of your suppliers have the appropriate insurance eg Professional Indemnity & Third Party Liability? It's all very well saying you will sue a supplier but if their overall net worth is £20k (once the mortgage is paid off) & they do £100k of damage, or worse still injure someone while working for you, then it's likely the lawyers are going to come calling at your door. Of course we don't know what your business is so if your suppliers are outworkers knitting bobble hats this is unlikely to be an issue.
I'm not sure how this is affected by a Supplier being a ST versus a LtdCo? Both can have assets of £20k. Therefore the fact that a supplier is a LtdCo makes very little difference. However, if I'm pursuing legal action,I'd rather chase somebody whose liability [b]wasn't[/] "Limited" IYSWIM.With regards to Supplier Insurance we check only when we run tender exercises (which effectively means contracts over £25k). We don't have anybody carrying out work for other people on our behalf so I don't envisage a situation where we could be sued by 3rd parties. If, by some twist of circumstance, we were sued, we do have pretty good insurance cover.
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