Bitcoin Forum

Reaching out to the UK Bitcoin community.

I have hired a small team of engineers working on a BTC web-service, we are in testing phase and hopefully will launch 3rd-4th Quarter 2014.
Based in the UK, a legal requirement for a Limited company is that we have a corporate bank account and a Chartered Accountant (ACA) to cook our books for annual tax returns.

Problem is, as far as I know, there aren't any UK Banks that will accommodate us. The mere mention of BTC-related business is enough for them to decline our request.

I am also a Pro Trader on Localbitcoins website, maintained transparency with my current bank since inception last year and have also recently upgraded to a business bank account - Now I recently was informed that BTC-related businesses maybe deemed an "unacceptable risk" via my Business Banking Manager (we are meeting to discuss on Monday). I think it will be likely that they will close my account or at least ask me to desist use their facilities for any BTC-related activity.

Anybody else in the same boat? We want to always be honest and have a good relationship with Banking Partner, however after discussing with a few friends - We have concluded, although wrong, an option would be to "mask" activity under some other form of trading, eg:

Gold coins,
Stamps,
Signatures,
Semi-precious stones,
Web Development/Engineering,
Digital Security Consultancy.

We would prefer not to do this but other option would be to stop trading or for our web project, incorporate/move overseas.

Any Localbitcoins friendly UK Banks (business banking) out there? Any workarounds/suggestions would be great!

Are sole trader accounts easier to manage wrt HMRC or Limited the way forward for BTC enterprises?



Will update this list and best practice approach for business account set-up

Friendly BTC UK Banks:


Lloyds Bank (via intermediary) "Capital Account"




Unfriendly BTC UK Banks:

Barclays

HSBC

Clydesdale Bank

Standard Chartered

Santander

The Bank of East Asia

Yorkshire Bank

Metro

TSB

Smile/Co-operative Bank

Halifax? (Part of Lloyds Group)

Citibank

Zenith Bank

Royal Bank of Scotland

Marks & Spencer Financial Services Plc

Northern Bank Limited

Westpac Europe Ltd

Harrods Bank Ltd

Ulster Bank Ltd

Credit Suisse (UK) Limited

Diamond Bank (UK) Plc

DB UK Bank Limited

ABC International Bank Plc

Virgin Money plc?

It seems most BTC businesses with bank accounts in the UK resorted to lying to their bank about the nature of the account and got shut down. You'd be throwing away a huge amount of effort for it only to be lasting a few weeks.

I don't know what's going to change banking attitudes here, but they need to pull their fingers out soon. Have you looked into credit unions? They're growing.

credit unions and building societies are more open to new business. but lying about the purpose of your business is the number one cause of banks shutting down accounts. but with that said credit unions are more for personal savings with monthly withdrawals. not really designed for business trades every few minutes.

i know that PUIK the guy that owned blockchain.info told his bank they were doing advert revenue business..
amir taaki the guy that owned intersango lied to his bank too and that caused issues for that business too

a few other people doing bitcoin businesses in the UK were using personal accounts and had issues as they did not have a companies house registration number or HMRC tax reference number to open a business account. so that was deemed as a breach of the banks rules.

i have privately offered advice to people but ill say this here too:
1) do not go to a bank pleading like oliver twist for some food (access to an account). MAN UP! be confident, be honest and treat the meeting as as a form of partnership agreement, treat the bank manager like a god. in the sense of this example

"you do realise mr bank manager, by you setting some acceptable rules for bitcoin businesses to meet to ensure bank risk is at acceptable levels, you will be the pioneer of this new technology, you could b the person that brings alot of legit business to your branch/company and you personally could become more then just a bank manager, you could become the bitcoin business expert"
(in short: brown nose him)

2) be a sales men. overcome objections. if they say there are risks, ask them what the risks are and how you can redesign your business plan to reduce the risk. do not cower away and accept the "risk" excuse and simply run off.

3) remember banks business involves accepting funds, so even if their mouth says no, the bank does actually want to see more money enter and pass through their branch. so dont listen to the no.. listen to their desire to profit which involves accepting accounts.

4) again dont turn up and simply walk out with your tail between your legs whilst spending 30 minutes listening to their objections. dont be submissive. meetings are a 2 way street, so talk back, ask more questions then them. answer more questions then they do.

5) if they are still unwilling... before they even do any action or any decision, get them to put it on paper all of their reasons and rules terms and conditions that prevent them from accepting your business.

ok now then 5 is important (hopefully wont get that far) as this can be used with your local MP to show that your legitimate business which trades in an asset that HMRC has clarified as being a viable store of wealth asset, is not allowed to start-up in your MP's jurisdiction due to the bank. pass this onto 10 downing street also. and drum up some support  that banks that have been bailed out using OUR taxes, are not allowing new business start-ups. show copies of such to proper national UK media (not childish bitcoin media such as coindesk, but proper mainstream media) and get the banks to look bad. but as i said i hoope in cases of new start-ups this month. it doesnt need to get to point 5

Nice one lads, and thanks again Frank!

For our Web implementation project, i think we will be fine, if not broadening the level of Service description for HMRC/Companies House registration.

As for Localbitcoins Trading within the UK - Credit Union and Building Society-type financial third parties would not offer the facilities needed for our transactions (Mainly Faster Payments Incoming FPI)

I tend to agree with Frank's suggestions and would approach my bank(s) with the same attitude. Any service denials/termination of account I will request formal written notification.

Will keep you posted.

It's pretty sh*t! As I mentioned before, we would like to be completely transparent with our UK banks. However for UK Sellers on Localbitcoins, there's not many options.

Right now I am forced to consider closing up shop or:

-opening multiple current accounts

-routinely modulating between them

-not declaring as business/sole trader

-not declaring any tax liabilities

-running them until eventual freeze/closure



There's got to be a better way for legit traders.

And possible risk of Fraud + Subsequent Penalties + Blacklisted?

credit unions wont help you much

but all UK building societies ARE faster payment enabled
so here is a list to try:
http://www.bankofengland.co.uk/pra/Documents/authorisations/bsoclist20140430.pdf

EDIT: actually both credit unions and building societies are more for individuals, not businesses.. thus i think your stuck with trying out your 'sales pitch' on banks

I dunno about fraud. I think they'd probably just tell you to go away.

Someone told me that since Intersango went tits up, which is the most blatant case of telling porkies to a bank in the UK, Amir Taaki hasn't been able to get a bank account for any purpose anywhere.

Since he's the anarcho type and a bitcoiner I doubt he's arsed. It might be a drag for more regular people though.  

Very useful yet disheartening topic for me as I am UK based am setting up my first bitcoin-related business.

What I don't understand is why does it matter if your business is risky?  It is not like you are applying for a loan or even an overdraft, it is just a bank account.  Worst case scenario if bitcoin collapses is your business is over and the profits left in your bank account won't grow any larger.

The way I see it, your best bet is to simply say you are mining bitcoins and just pay capital gains tax on it if you pass the threshold.

Cheers man, to be honest, I haven't heard of many on that list - Will look into using Building Societies as an option, but at a mind right now that it wouldn't be worth the hassle. Plus most of them don't offer Business Accounts, so would have to trade under Personal Accounts.

I guess it might be because the UK government has been almost totally silent about the whole crypto thing compared to the US, which looks like a BTC paradise in comparison.

The HMRC has been active and constructive, but I suppose banks are going to wait for noises from government.

Let's hope someone twigs soon.

Just meant because I would be lying to them essentially. Not really telling them that my business it directly related to BTC

if only Virgin Money done business accounts, we would be sorted. as we all know richard branson loves and understands bitcoin

Guess we need to ask them

Don't be dis-heartened brother, where there's a will.......  plus with the help of community on side, we'll find a solution for your business. Our banks just seem unenlightened/protective right now.

Looked into them, they are still treading water about opening/offering just Current Accounts

You guys notice most banks offer this FSCS (Financial Services Compensation Scheme) - maybe it's to do with that?

Bitcoin not being considered "Eligible"

You'd think in these European times there would be bank on the continent that could offer some type of GBP option. If you were dealing in Euros you'd have several operating options ready to go.

Just spoke to a friend of mine - He's was made redundant almost 2 years ago, and now a Sole Trader/Self Employed as a Taxi Driver.

He told me he's not running his accounts through a Business Account, just using his regular Current Account, which I thought was surprising!

Looked online and he's right:

http://www.easyaccountancy.co.uk/freelancecentre/setting_up_self_employed_freelancer.html (Setting up a Business Account)

https://www.primusaccountancy.co.uk/usefulguides/soletraderguide.php (Banking Considerations)

The problem with the primusaccounting advice about sole traders using standard current accounts. is that usually wire transfers are very far and few inbetween. maybe 1 a week to pay a bill (4-5 bills a month). but when it comes to doing 20 a day, that borders in the EU directives regarding the wire transmission limits for personal use.. thus a business account is more legitimately suited for localbitcoin day-traders.

but i do agree that thesecond half of the advice primus mentions is true. to have a business account and a personal account, and only move funds into the personal account for personal (wage). as it does make it so much easier to audit your business vs personal finances

I believe there is mix reviews about llyods bank. I think some people have had problems and others have told their bank that they trade with Bitcoin and they were fine with it.

there are mixed views about most banks. its all about th 'sales pitch' you give to the bank manager, which h then classes as high risk low risk. i personally found my bank manager cared more about my intentions and honour, rather then the business model

As was the case with me, my branch manager's a good guy and we've maintained a good relationship - But this is just One Guy and not fully representative of Lloyds Group with respect to the treatment of Bitcoins, especially from a business perspective. From his point of view, he was happy with how I maintained my accounts, never zero/negative balance, higher than average fees/charges for IMT's, FX Exchange fee's per month paid out to Lloyds, a good customer.

The problem I had was migrating to a Business Account and letting them know my business involved Bitcoin. In fact I've heard some people had their accounts frozen for incoming/outgoing transfers Referenced + "Bitcoin".

It's hard because most traders are legit and once their turnover exceeds VAT threshold the reasonable thing to do is register as a Sole Trader/pay any Income Tax liabilities/Partition to Business Account. Now I know HMRC do not impose any VAT on the trading of Bitcoins themselves but I thought registration and migration would be the best thing to do. Properly shot myself in the foot  :)

Blatchcorn, I spoke to a BTC specialist accountant/financial adviser last week:

http://www.nowellassociates.co.uk/bitcoin   a grand lady Norma Nowell, they have many BTC business clients in UK but mainly eastern European countries, we discussed UK regs and tax issues. But she told me about smile/Co-operative bank and suggested they are BTC friendly at least more so than our other banks. I will be meeting with their branch manager on Tuesday.

I'm treading carefully because don't want to get flat "No" wrt to business banking with them, for my purposes just a simple Current Account might serve me well, there IMT's are fairly competitive too, for overseas exchange funding (8GBP).

Will try asking them about BTC perhaps at a later date. But I would suggest you do the same for your business, perhaps find a branch in neighboring town, lock-in a meeting and discuss Bitcoin to hearts content. Alternatively you could call their business group http://www.co-operativebank.co.uk/corporate/customerservices/contactus/phone-us#generalnumbers

All goes well, they might be happy to open a Business Account for your BTC enterprise :)

Just a handy very brief summary for UK BTC traders:

https://blog.quickbitcoin.co.uk/good-and-bad-uk-banks-for-bitcoin/

Posted on a competitor site to LocalBitcoins

If only we had these were I lived. By the way, how would this work exactly? Would it be like walking into a physical Localbitoins?

Right on mate! - Us UK Bitcoiners are lucky in that respect, something I've taken for granted - The Faster Payments network offered by most UK banks has certainly benefited me over the past year.

We have the ability using our Online Banking services to transfer fiat (GBP) funds to another UK bank account typically under a minute.

I'm guessing where you are from, clearing funds takes much longer (3-8 days?) via Cheque, Standing Orders or Giro Credits (old payment methods banks use)

You can still use Localbitcoins website though - in a lot of places, people use this site to arrange meeting in person, where you can exchange your local currency for Bitcoins directly with a Seller.

If you try this, I would advise you check the Sellers Feedback, meet up in a public location, maybe bring some friends with you (basically just be careful)

Here's a link to their website: https://localbitcoins.com/

Just type in your location, then select the best payment method that suits you. If you click on the Sellers name, it'll bring up more information about the Seller and you can check his/her Feedback and contact information.

Thanks a lot mate.  Really appreciate the advice.  Good luck with your meeting

Looks like we have some progress in UK. Friendly banks, ATMs... Seems like BTC can find good ground here rather that in US

Strike The Co-Operative Bank/Smile of your list of UK BTC friendy Banks!!! Done a few small transactions on Local Bitcoins, they cancelled both my cards and blocked my internet Banking, made me speak to fraud department. As i thought 1 of the transactions must have been fraudulant i told them it was from Local Bitcoins. "It is our policy not to allow any Bitcoin related business"

edit: small as in worth altogether under £1000 in 3 or 4 sells, so not that small!? :)

That is just pure insanity.

What happens to your money inside the bank account in those circumstances?  Can you withdraw it?

Yeah, the Ethical Bank  ;D ;D ;D

Just like any other 'organised crime' outfit.

Well i couldnt use cards or internet banking but i assume they wld have let me use phone banking or in person???, none of the transactions were even fraudulant and all the people i traded with had been verified with good feedback. I asked them why they had this policy and they acted like i was a criminal, "we will be keeping a watch on your account from now on for any Bitcoin related activity!!!!"

ok some things to remember.

you dont technically need a business account as a sole trader but if your using your main (personal account) remember that banks look at what money is coming in. so if you are getting a jobseekers payment or a wage of a couple hundred a week(which they class as true income).. and then you are doing movements of funds of more then a couple hundred a week to a random person(s).. it will be flagged. this is why you would normally get a business account so that different flags/less apply to the account.

i personally have both a business and personal account. all my bitcoin stuff is done on the business account, to which my bank manager knows all fully well what the movements are for. and i once a month move enough across to my personal account to then use my personal account to pay the bills. that way my personal account shows a once a month income payment. which is separate and not technically classed as bitcoin related. (it also makes tax accounting far easier).

i truly advise anyone that uses one account for everything. if you get paid your £140~JSA every 2 weeks. to never move more then £140 in a 2 week period to random local bitcoin people. same goes for people with real life jobs. dont move more then your weekly/monthly pay. in the same weekly monthly timescale.

if you wish to do so, get a second account

there are other flag triggers which banks will not admit to (to prevent abuse / workarounds by fraudsters) but so far keeping your personal income separate from bitcoin trades helps you from not hitting one of these flag triggers

luckily im not on JSA or on any employment contracts for these flags to be mis-interpreted by the banks. but i still keep bitcoins out of my personal life

just been bored recently and stumbled across human rights paperwork, it had been a while since i looked into it, but it got me thinking about this topic on banks.

banks are perceived as a human right, that everyone should have the right to one, (as long as they are not doing any illegal activity). so unless proven illegal activity is taking place a bank should not close an account, as thats discrimination..

so i think the co-op has something very public that can ensure, as long as your bitcoin stuff is above board (no drugs, guns or terror) that they should not close accounts, due to HMRC validating bitcoins in the UK

so if you own a co-op account and have issues.. show them their own words and ask them for the exact reason they wish to shut the account.
http://www.co-operativebank.co.uk/aboutus/ourbusiness/ethicalpolicy/human-rights

Hi All,

Well. I'm a UK business owner and bitcoin is a second (small) income stream for me (mainly mining plus a few other things).  When I started with bitcoin I wanted a second business account specifically for it.  I met with a local HSBC manager and she seemed quite interested in it when I explained what bitcoin was.  Got the second account no problem.

I suspect that if I was a new customer (as opposed to an current one, with three years of filed accounts behind me) and was pitching a bitcoin based business, it could have been a rather different outcome.

So I agree, UK banks seem, overall, quite hostile towards it.

One thought : All the talk on this thread has been about the big banks.

Has anyone approached the smaller private banks to try to get a business account there?

Cheers

Dave

Open bank account in Australian bank

Done - Sorry haven't maintained tread for an age :D

Yes, spoke with Co-op a while back, definitely a no go for BTC Business Accounts.

Wish I had bought that to my Co-op session would have been great to hear the reps response :D
 

Coinfloor, an emerging UK exchange market place for BTC are running their Faster Payments via Lloyds Bank using their "Capital account" product. I haven't used them thus far because their BTC spot price was very high (7-12% over Bitstamp). However the margin has decreased significantly to around (2% over Bitstamp) this past week. Definitely on my radar as becoming somewhat competitive now.

im looking into developing a template that mentions to UK banks a few fun things. but i will look into them in detail and see which holds weight. read these 2 links and you might understand a few subtle hints i would want bank managers to know when us bitcoiners set up accounts or get told they wish to close our accounts
http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2010/03/a_legal_right_to_a_bank_accoun.html
http://www.bbc.co.uk/news/business-19511542

Has anyone tried Coutt's?

Hi,

Just came across this topic.  While I have 2 business accounts for our property business and now involved in Bitcoin and doing some trading but ideally want to keep it apart from our other businesses.

I have struggled to get a business account spoke with Lloyds they said no,  Used a Digital Bank called Tide and only lasted 6 weeks.

Any experts on here whom can advise which bank to go as we are fully tax paid business and have good relationship with the banks

In all of human history there has not been one single business in the UK associated with cryptcurrencies that has obtained and maintained a British business bank account. It simply cannot be done.

That's why there are no exchanges and little or no business compared to other countries.

Your only hope might be when Fidor launches business bank accounts, but Fidor is looking increasingly useless. Their personal accounts lack giant amounts of functionality.  

I don't know how the Localbitcoins traders do it. I assume they hop from account to account.
 

Fidor is useless already have it and there too slow and not BTC Friendly at all.  Not sure how the LBC Traders do it spoke to one but obviously he could not advise but said they have accountants and lawyers etc in place.

I am sure there must be a way around it or something.  Anyone had dealings with Co-Op Bank?

Thanks

If there was a way around it Bitcoin would be flourishing in the UK. It isn't so there isn't. It's just a fact of life. Nothing's changed since this thread was started.

If you check r/bitcoinuk, pretty much the only subject is how to handle banks.

Bitpay and Coinbase do offer merchant processing but the only possible way they're doing that is by sending GBP from Europe. The only quasi realistic UK exchange is Coinfloor and they have to bank in Poland.

Nationwide sounds like the least crypto hostile. That doesn't mean they'll be open to a business account but it's worth an ask.

Spoke with Lloyds and they were not interested,  I know Barclays are useless as was using Tide Business Account powered by Barclays and they closed down in 5 weeks for no reason nothing to do with chargeback.

Will give Nationwide a buzz and see what they say.

However disagree you mention BTC is not doing well in UK.  For the small time I traded on LBC it was busy was only trading with £5000-£8000 and was getting buy and sell orders like easily shifting 1-2 BTC but seen many people doing £50K+ a day on there?  (Confused on the trick I am missing)

I'm sure BTC itself is thriving, but BTC enterprise certainly isn't.

The big LBC traders must have some major banking secrets up their sleeves. I'd be very curious to know how they do it and some have countless thousands of trades. I guess they're not going to let their secrets slip.

As far as I know, this is the only way to do it in the UK. All UK banks have to comply with Bank of England supervision and that means no crypto businesses. You can trade small amounts that go unnoticed in a personal account, but for any large volume, you need to go to an offshore bank that lets you have a GBP denominated bank account. You are still going to get hit with wire fees for international transfers. I haven't checked it out but Isle of Man or the Channel Islands might be worth looking into.

Yes BTC Enterprise is about as messed up as it can be as Banks don't support them.  For LBC need faster payment and hence offshore etc won't work for me.

Spoke to 1-2 big traders they only gave some tips but did not spill the beans and fair dues as some of them must do 100's of trades a day as I was doing around 15-25 trades a day.

Not looking to trade small amounts as it's a full business set up and want to do it properly legally and with all compliance.

Isle Of Man or Channel Islands may not have faster payment.  Maybe someone on here know's something we dont lol

This will be a very great and nice concept but the problem you will encounter is getting government approval to run the bank. There is no harm in trying.

Think the government and even Bank Of England don't have an issue as they have done a consultation on this but it's the Bank themselves just being daft.

Well in couple of years if Crypto Take's over then the Bank go do what they want bloody idiots lol.