Opened the wrong type of account, too late to change it...

[PearPeer]

I started a small business last year.

I opened an account with an online bank, for client's payments to go in. When it came to opening the account there were several options including a business account that you had to pay for, one you didn't, and a personal account. I chose (or at least thought I did!) The business account that I didn't have to pay for. The 'perks' that came with the paid one were all things that wouldn't be of use to me so I didn't see the point in paying almost £150 per year for it.

Anyway, I've had a client question that I was 'dodgy' because when they went to pay their payment the account said it was a personal account. I sorted this out with the client, but I now note that the account I opened is fact a personal account.

I daren't speak to the bank about it, as maybe I've done something illegal or at least immoral, for using an account for business purposes?Having said that I don't think so, as I have another business which I am sure we use a personal albeit joint account for. It's an honest mistake, but I can't risk having this account closed down and I can't close it and open another one as a lot of my clients pay monthly into it.

Is there anything I can or should do here?

Tell the bank you made a mistake and get the account changed or just open a business account and close the personal account. If it comes up explain it was a genuine mistake opening that account.

Just make a business account with the same bank. If it’s Monzo you can have multiple business accounts and sole trader.

Op says she can’t close it and open a new one as customers pay in monthly.

however - surely you just tell them all and give enough notice? Transition them over slowly and once they are all paying in to the new one close the personal account.

It is Monzo! First time I've used them and I did find the interface somewhat confusing.

I can make a business account and transfer the payments over manually, if that would mean I wasn't doing anything unlawful.

Their payments will only run for 20 weeks, It's a new business and I am hoping to get repeat custom so would really rather not mess people around. If there's another way I'd rather do that. If it has to be, I will obviously.

Yes, I think I am scared they'll insist I must change it to a new account and I would much rather not if at all possible.

Are you a sole trader? If so it’s fine
limited company monzo should have caught it

Also it’s not messing clients around to inform them of a change of account details, they should be clearly stated on your invoice anyway

It might be against the account’s terms and conditions but it is not illegal.

I am a sole trader.
Thank you for the advice everyone. I will speak to the bank and see if they can somehow upgrade it.

I’m a sole trader and have had a personal account for business for 35 years, so you are not doing anything wrong. I just make sure that only business stuff goes in and out of that one and I have other personal accounts for personal use. No one has ever questioned it, or said I was dodgy

Sole traders in UK can use personal bank account so you've not done anything wrong. My invoices just note the name on account is mine not my trading as name and it's only flagged as a problem once in 15 years when I just told client to change it and it then went through :)

If you're a sole trader it's fine because 'you' and 'your business' are the same thing. It's definitely a good idea though not to have any personal money going through that account, it makes doing your books much quicker if you know all your incomings and outgoings are business related.

I wonder what they were teaching in school instead of basic finance like this ?

You don’t need a business account so I wouldn’t give this a second thought.

https://monzo.com/help/opening-an-account/using-current-account-for-business
You will need to change it to a business account, you are not doing anything illegal but it's against Monzo's t's &C's.
You could keep going as you are but they will eventually figure it out and ask you to open a business account.

I am at work but will read through that shortly--I assume I would have to change it to a totally different account without option to upgrade it.

I agree about teaching basic finance in schools! A lot of it is still a minefield to me, especially when it comes to taxes etc.

I work for a bank but not Monzo. I would imagine it will have to be opened as a brand new account as personal banking and business banking are separate.

Everything else the government demands we teach.

How is it basic finance?