Freelancers - Section 23.1 T&Cs


#1

If I receive payments into my account from companies I work for as a freelancer (sole trader), do I need a business account?

The tricky bit in the T&Cs seems to be Section 23.1: "You warrant that … [you] are acting for a purpose other than a trade, business or profession."
Do I need to open a special freelancer/business account just to receive earnings?
The business accounts are far too expensive for my purposes (I don’t need 100k FX) and the freelancer account just looks like a Premium personal account.


#2

Yes, this is exactly how I would read it. If you are a freelancer, get the Business freelancer account. In the FAQs of the personal account, there is this phrase that “3rd party transfers from friends and family” are possible. That seems to be another hint that the personal account should not be used for (any kind of) businesses.

But if you would get the account for freelancers, you can order a completely white or black card! Isn’t that something?


#3

Thanks Frank! That seems to be the logic Revolut is following, but it’s not actually that clear.

The problem is that sole traders are also acting in a personal capacity, i.e. there is not normally a distinction between your personal income and your business income (e.g. for tax purposes).
You then get to the tricky point where you need to decide whether the payment you receive for an invoice you issued in your capacity as a sole trader is in fact receipt of personal income - it’s certainly treated as personal income for tax purposes etc.

I’m not sure it’s clear with other banks either, to be honest.


#4

Essentially, I think Revolut should spell out very clearly whether they allow sole traders/freelancers to receive payments from clients into their personal accounts.

Particularly as there are a lot of features for the freelance account that really don’t make sense for most sole traders (because their volumes are just too low, you’re not going to operate in loads of different currencies etc.), such as:

< £100K of incoming funds *per month*
Hold, receive and send money in 25 currencies
Free, instant transfers to companies using Revolut
Revolut corporate cards

These are surely pointless benefits to your average freelancer.


#5

Well, I only know the situation in Germany.

Technically, freelancers and sole traders conduct business, it’s just regulated differently than other businesses. With bank accounts, it might be still personal use, but it’s not consumer use. And all banks that offer traditional current accounts here in Germany make this distinction. Personal accounts should not be used for business expenses/income.

Having said that, I know many friends and colleagues that started using their personal accounts for their freelance work. And many banks seem to accept this to a certain degree. But I also know cases where the bank terminated the account because of a T&C violation.

From the perspective of the bank, this makes sense: business accounts are usually a little bit more expensive. They are less cross subsidized with other consumer offers. And business payment cards are not affected by the EU interchange fee regulation. Business cards have higher merchant fees!

I am just guessing here, but I believe the reason for this being phrased so vaguely is that a service provider needs to have the T&Cs bulletproof, for regulators and partners like Mastercard (who make a difference legally between consumer services and business services). But they also want some wiggle room for the occasional payment for freelance work. I would not risk using a service like Revolut as a business account or as a mixed personal/business account with a considerable amount of business related transactions.


#7

I wrote a long reply, but it was blocked by the bot I think…
I think Starling is doing a much better job of the personal v sole trader thing


#8

@minimim

I never heard of Starling. Thanks for the tip.


#9

Check out their “business” accounts. No multi currency accounts yet, but they are coming soon apparently…


#10

Question:

I do freelancing from time to Time (to support my travels) in 3 ways:

  1. Small in value directly with a non commercial client > Paypal
  2. Small in value directly with a company > my personal bank account
  3. Bigger than usual in value (both commercial and personal end user) > escrow which gets in my personal bank account.

Is not faisable to open a :r: business account for me for 2 transactions in 3 months (except if it’s free and I don’t order any card just transfer out to my personal :r: )

:thinking: good to know tho. For the first cathegory I was thinking to just make a rev.me but seems is not a good idea :thinking:

And I can’t find “schedule 2” to see the fees


#11

I’m checking them right now.

I’ll keep my expectations on the low side though as I tried many of these internet “new banks” and as soon as you start receiving transfers from a considerable amount of people they are all the same crap.


#12

Probably


#13

I see the fees only for personal accounts (on safari iPhone)


#14

Go to the main website, then business, then pricing, then freelancer. You can do it :wink:


#15

found it, but on mobile is not showing at all.

Still, does’t seems to worth in my case…so I’ll continue to use my bank personal account for this.

Free, instant transfers to companies using Revolut

What if I have to pay other freelancers? Their account might be personal account with other bank. Or what if I have to pay a co-freelancer (for example we both work on something, I get the entire payment and we share it)?


#16

That depends on if you act as a private consumer or if it’s business related. You can of course pay a freelancer or businesses. That’s what you do all the time when you pay with the card.


#17

I mean as business related and only transfers (no card payments) which might be to personal accounts or to companies. Many freelancers and other people with which I colaborate use their personal account and not a commercial one. A transfer out to one of those can be marked as “personal payment” by :r: and end with account suspension and so…

With my bank I also have a separate EUR, USD and RON accounts for freelancing.


#18

What is the question here? I am confused now. Why would it matter what kind of account someone else uses to determine the purpose of your transaction? All that matters is what you use your account for. Am I missing something? :thinking:


#19

You need to decide whether a transaction is a personal transaction or a business transaction, because that determines whether you are complying with Revolut’s terms.

The problem is that it’s not clear how Revolut would decide on a given case, so you’re at risk of your account being suspended, even though you may think you’re complying with the terms.

If you pay from a Revolut business account into the personal account of another freelancer for services rendered, is that a business transaction?


#20

Technically is a business transaction if I pay another person in his/ her personal bank account for a service he/ she offered based on a collaborative contract.

But looking on the statement Revolut can consider this as personal usage of business acou t which doesn’t comply with T&C.

That’s why, for now, I’m keeping freelancing with the bank and not :r:


#21

I think you are both overthinking this. Revolut has no knowledge if somebody else’s account is business or personal. There is no feedback here. And as a business, you can of course pay salaries to private accounts. And as a freelancer, you can of course withdraw money to personal accounts. In many circumstances, it’s just impossible to know for the bank if expenses are private or business. Hotel, train, restaurant, a laptop, mobile phone bill … this goes on.

But revenue streams are different with business and private accounts. And many of Revolut’s additional services are also designed just for personal use. And the way how you can buy insurances and stuff directly without further identification makes it maybe more critical to draw this line.