High street banks are prohibiting inward investment into the UK

High street banks are prohibiting inward investment by simply refusing to open bank accounts for companies wishing to set up in the UK, say leading tax and advisory firm, Blick Rothenberg

Andrew Sanford, an audit and advisory partner at the firm said: “ At a time when BREXIT is of key concern to international trade, it is extremely unhelpful that well established overseas businesses are having such barriers to entry put in front of them.”

He added: “ We have seen documentation from one high street bank stating that in order for an inward investment client to open a bank account that there had to be one UK resident director and a minimum of £2 million turnover in the UK. Most companies setting up in the UK often do so initially with a few employees to test the UK market, having established their business in their home market. As such few initially will exceed these thresholds.

“ Equally when establishing the business, it is not often sensible to have a UK based director initially, as the staff they are employing are unproven.”

Andrew said: “ Many of these restrictions have been put in place due to additional ‘Know your client checks’ implemented due to more stringent anti – money laundering regulations. Whilst, this is understandable, there cannot be carte blanche restrictions on good companies wanting to invest in the UK.”

He added: “ In recent months, restrictions in opening a bank account have if anything become more difficult, with the Pandemic often being cited as a reason.

Andrew said: “ It is not only overseas clients who are being affected by these restrictions. We have heard cases of new UK businesses wanting to set up a bank account waiting several months to open an account. This in some situations has prevented them receiving tax refunds from HMRC, as HMRC will only make tax refunds to a UK bank account.”

He added: “ Given the stresses on the UK economy at this time, there is a real responsibility on banks to review their take on procedures and be more flexible for businesses that could be the driving force of the economy going forward.”