Access to bank accounts biggest barrier to international trade say accountants

A lack of access to UK business bank accounts is quickly becoming the biggest barrier to post-Brexit international trade for the UK, says UHY Hacker Young, the national accountancy group.

UHY Hacker Young explains that overseas businesses wishing to trade in the UK are now routinely being turned down when seeking to open business bank accounts. It says that many banks appear to be very nervous about any potential compliance risks posed by businesses and are choosing to operate a blanket policy of refusing applications from overseas.

Reasons given by banks for not allowing a business to open an account seen in recent months by UHY Hacker Young’s team include:

• The business not having staff present in the UK
• Staff present in the UK not being sufficiently senior in the business
• The mobile phone number used to register the bank account being a non-UK number
• The business not being VAT-registered in the UK

UHY Hacker Young says that the problem is not limited to small businesses that are difficult for banks to verify using their ‘Know Your Customer’ systems. One client of the firm, an Australian listed business with a significant annual turnover, has been turned down for a UK account by several banks despite it complying with all the governance requirements of the Australian Stock Exchange.

The firm says that the problem has become noticeably worse since Brexit, with new requirements around import duties and VAT increasing the risk of compliance issues for overseas businesses selling in the UK. This has seen some banks reduce their tolerance for risk even further.

Clive Gawthorpe, partner at UHY Hacker Young, comments: “Britain needs to attract overseas businesses to invest and grow here. Getting a UK bank account has become an unnecessarily big barrier for a huge number of businesses who want to do that.”

“It’s understandable that banks don’t want to take compliance risks but when listed businesses are being rejected for bank accounts, they have gone a step too far.”

“We would love to see the government work with the banks to clear this blockage. As it stands, Britain is leaving economic growth, new jobs and increased tax revenues on the table by building needless trade barriers.”