My son has been running a micro micro business which hasn't make a profit and between us we have decided it would be better for him to help me run the internet side of things that I am in the process of developing further. As such he is ceasing as a sole trader and we arranged for him to close his business account and, after speaking to the credit card people, pay off his business credit card monthly until it's cleared. Unfortunately the bank won't close the business account until the credit card is cleared, which will take 2-3 years.
Does this mean he still needs to stay registered for self employment, even though he won't actually be trading?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John
HMRCs own website say to tell them if you 'Stop trading' which he has so I would put that call out. Him being personally liable for any business debts is a separate issue to the tax. Re the Bank credit card - he will be paying Bank charges on the current account if it has to remain open, generally a set minimum for smaller businesses, so might be worth considering moving the debt once youve weighed up that fact as well as the interest on the credit card versus what you can get elsewhere.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks for the advice, I agree but just wanting to clarify. Because the business account would still be open, and a a transaction occurring so as the bank charge could be paid, I wasn't sure if that was classed as still technically trading.
Bank charges are not too bad, a fiver a month, but it's an extra £180 in their pocket for doing absolutely naff all. I can't see why they just can't close the account as they've already agreed he can continue paying the credit card off, he checked that before trying to close the bank account.
The interest on the card is quite reasonable, and affordable. It may be worth seeing if they will switch it to his personal card, providing they're willing to increase the credit limit (same bank and similar interest rate)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
When they trading are they not going off the strict definition of buying and selling goods, or selling services. Your so. Isn't doing that, merely paying off his obligations. Do NOT go to the same bank about a card limit increase and mention repayment of debt on another card......do you never listen to Martin Lewis banging on about such things. Lol. He may drive you nuts but he does occasionally talk sense, plus take it from an ex banker.....never mention it. If the current account had been a personal one he could've closed the account because the banking and cards divisions operate separately, but it's a bit different with the business account. Dare I ask which Bank? Anyway regardless.....go find a card, any card that has a lower rate or a free period AND offers free balance transfers and just repay the business one. Might take a bit of shopping around as the seem to be less deals out there.....go on Martins site first perhaps and if there are none now then look in a couple of months.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Oops forgot to add (doh).....check the cards terms and conditions.....if it's not a condition to keep a Bank account tell them to get lost and close the current account.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Oops forgot to add (doh).....check the cards terms and conditions.....if it's not a condition to keep a Bank account tell them to get lost and close the current account.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks Jo, the bank is Natwest. He's already done the closure part, but they rejected it. There's no issue with the credit card side, they closed the card so that no further transactions could be made, and were happy to let him continue making the usual monthly payment.
He's going to send a letter of complaint, and if they don't relent we'll pursue another card for him. Thanks for the heads up on increasing the limit for that specific reason, I didn't know it was taboo. I've dipped in on Martin Lewis occasionally but your comments were something new to me.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Thats just weird on the current account side. Was it a relationship manager who rejected it? Before you do the complaint definitely check the card terms then you can add this to your letter if you dont need a current account!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Checked the terms and conditions and no mention, so son sent letter off querying the decision and asking them to look at it again. No reply but when he checked online at the weekend the bank account had been mysteriously closed. No reply from Natwest which I think is discourteous but a result none the less. Thanks for your help Joanne
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
No probs John, glad you got it sorted. They just cant get the staff these days!! You should get a closing statement and you might find their response is after that.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
