UK Bitcoiners Friendly Banks Business List Localbitcoin Traders

[RockHound]

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?

[gentlemand]

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.

[franky1]

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

[RockHound]

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.

[RockHound]

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.

[RockHound]

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.

And possible risk of Fraud + Subsequent Penalties + Blacklisted?

[franky1]

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)

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

[gentlemand]

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.

And possible risk of Fraud + Subsequent Penalties + Blacklisted?

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.  

[blatchcorn]

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.

[RockHound]

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)

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

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.

[gentlemand]

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.

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.

[RockHound]

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.

And possible risk of Fraud + Subsequent Penalties + Blacklisted?

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.  

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

[franky1]

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

[blatchcorn]

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

[RockHound]

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.

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.

[RockHound]

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

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

[RockHound]

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

Bitcoin not being considered "Eligible"

[gentlemand]

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.

[RockHound]

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)

[franky1]

Just spoke to a friend of mine - He's was made redundant almost 2 years ago, and now 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