Spring Budget 2023 - what does it mean for the self-employed?
The Spring Budget was announced on March 15, 2023 - we unpack the key announcements and what they mean for the self-employed.
We’ve heard via one of our members that a number of ‘e-account’ banking accounts and pre-pay platforms will be subject to activities being frozen by the FCA over payment provider “Wirecard” which powers apps including Anna and Revolut.
If you’re using Anna as a bank for your business, Curve or Revolut - you may be affected, and Anna at the very least is recommending you remove your money from your accounts.
This is potentially a huge concern for many small business owners - first the concern over whether your funds are protected or not (FSCS does not protect these accounts, the provider must).
The Financial Times says "WCS uses an e-money licence rather than a full banking licence, meaning customer funds are not covered by the Financial Services Compensation Scheme. However, the company wrote to customers on Thursday, before the latest FCA intervention, to reassure them that all client funds were safely held in segregated accounts with major banks.”
Whether funds are ‘protected’ or not, it may still mean you’re not able to access your funds as the FCA have ordered all activities to cease, effectively meaning your funds may be locked up and inaccessible - which will undoubtedly lead to huge cash-flow issues for many small businesses and freelancers, who often turn to the modern digital banking solutions for their business banking, preferring the speed and agility of the apps over traditional banks.
Financial worries are a huge cause of anxiety and stress for the self-employed already - and financial wellbeing is the leading cause of stress in the UK, but when an issue is out of our control, anxiety can be even more significant - and frozen accounts can very rapidly lead to cashflow issues and debt, which make matters worse. This issue also affects many 'pre-pay' accounts which are used by low-income households and could cause more issues to those who are already struggling with money.
As cash flow is critical to any business - we are recommending the following for all of our members to enquire at your bank, and confirm your funds will not be frozen, or what actions you need to take to protect your money. We believe the only accounts affected are Revolut, Pockit, Soldo, Anna Money and Curve - but if you hear from your bank that your funds may be at risk, let us know, and we will list updates below.
There are more details here, and a statement from the FCA here.
ANNA: ANNA Money uses Wirecard Card Solutions to process payments. Anna are recommending you remove your funds from your account. The FCA action means the money in ANNA customers’ accounts will be frozen. Your money remains safe. However, the FCA action over Wirecard means that you may not be able to access it.
SHOULD BE OKAY:
Revolut: Have moved all their operations away from Wirecard.
Tide: Confirmation that accounts have not been affected by this.
Starling: Confirmation that accounts have not been affected by this.
Monzo: Confirmation that accounts have not been affected by this.
We can keep you posted on new articles, content and support from Leapers - just leave us your email address. We'll never share or sell your details, nor spam you - just occasional updates on new ways of working well, useful for every modern worker.