Sole trader customers
Sole traders overview
Sole traders are natural persons operating a business in their own name. You can manage your sole traders' data with ClearBank directly as an embedded banking partner. Creating a sole trader is necessary before you can create accounts for them.
The data required to register a sole trader is a combination of fields associated with both legal entities (incorporated businesses) and retail customers. This is because a sole trader is simultaneously an individual and a business. For example: a sole trader has both an individual's personal details - such as a firstName, and details of their business such as a tradingName.
Compatible account types
Sole traders are eligible for certain account types, these include:
- Savings accounts
- Hub accounts
- Cash ISAs
- Current Accounts
For more details on available account types, please reach out to your Client Director.
Create, update and retrieve a sole trader
Business information
In addition to a sole trader's personal details, you can provide information about their business. This includes their tradingName, annualRevenue, and businessClassification.
A sole trader can use their personal name as their tradingName, or instead pick a business name. Guidance on acceptable business names for sole traders can be found on the gov.uk website.
The annualRevenue you provide for a sole traders should be based on their previous year's revenue. If this is their first year of operation, an estimated value is acceptable.
You can specify the businessClassification details of a sole trader. Their businessClassification.sectorCode should always be _8b_UnincorporatedBusinessesOtherThanLLPs, while their industryClassification should be the option that most closely fits their business.
Know Your Customer (KYC) and Anti-Money Laundering (AML) fields
When you create a sole trader, you'll need to provide the outcomes of any KYC and AML checks you conduct on them. You can record these outcomes using the kycAml object. Guidance for each of the object's properties are listed below:
sanctions- If your KYC checks identify the customer as sanctioned, set totrue.pep- If your checks identify the customer as a Politically Exposed Person (PEP), set toYes_DomesticorYes_Internationalaccordingly - otherwise set toNo.rca- If your checks identify the customer as a Relative or Close Associate (RCA) of a PEP, set toYes_DomesticorYes_Internationalaccordingly - otherwise set toNo.craRating- Use this field to declare a Customer Risk Assessment rating for the customer. There are four tiers of risk:Low,Medium,High, andVery_High.
If you have new KYC or AML outcomes for a customer, you can update these using the PATCH /customers/v2/sole-traders/{customerId} endpoint.
Addresses
When you create a sole trader, you'll also need to provide their current residential and/or trading address in the addressHistory.currentAddresses array. You can optionally record their previous address history using the addressHistory.previousAddresses array.
Sole trader addresses
When you create a sole trader, you'll need to provide their current residential and/or trading address in the addressHistory.currentAddresses array. You can optionally record their previous address history via the addressHistory.previousAddresses array.
A sole trader can have more than one current address by having both a residential and trading address, but no more than one of each.
You can update a sole trader's current residential or trading address using the POST /customers/v2/customers/{customerId}/current-addresses endpoint. When you do this, the sole trader's current address of that type - either residential or trading address - will be automatically moved to the previousAddresses array, and will have a validTo date set to the new address' validFrom date. If you do not specify a validFrom date for the new address, it will default to today's date.
It is not currently possible to delete a previous address.
Sole trader ID document endpoints
Similar to retail customers, you can optionally provide identity document information for sole traders. For example, you can provide a sole trader's passport number idNumber and date of expiry idExpiryDate in the identityDocuments array in the POST /customers/v2/sole-traders endpoint.
If you provide customer identity information, you must always include its idCountryOfIssue, idType, idNumber, and idExpiryDate. The combination of idCountryOfIssue and idType uniquely identifies a customer's identity documents in our APIs. You can therefore only provide one idCountryOfIssue and idType combination per sole trader.
To update or delete an existing identity information, use the PUT /customers/v2/customers/{customerId}/identity-documents/{idCountryOfIssue}-{idType} or DELETE /customers/v2/customers/{customerId}/identity-documents/{idCountryOfIssue}-{idType} endpoint accordingly.
There is currently no facility to upload images of customer ID documents.
Tax residency endpoints
When you create a sole trader, you must specify at least one tax residency for them. A customer can have dual tax residency in certain situations, such as if they live in one country but earn income in another. You should specify all currently active tax residencies for a sole trader when you create them.
US citizens are generally considered to be US tax residents regardless of where they live.
To change a sole trader's tax residency from one country to another, follow the below steps:
- Add the new tax residency first. You can do this using the PUT /customers/v2/customers/{customerId}/tax-residencies/{countryOfTaxResidence} endpoint.
- Delete the old tax residency. You can do this using the DELETE /customers/v2/customers/{customerId}/tax-residencies/{countryOfTaxResidence} endpoint.
Note: If a customer has only one tax residency, you must add a new tax residency before you can delete the current one. If you attempt to delete a sole trader's only tax residency you will receive a 422 - Unprocessable Entity error.
Customer relation endpoints
The POST /customers/v2/customers/{customerId}/related-parties endpoint allows you to link two parties by providing their customerId and specifying the nature of the relation.
Note: The arrangement of customerId in the path parameter and the relatedCustomerId request field matters when creating a customer relation.
The customerId in the path refers to the primary customer, while the relatedCustomerId refers to the customer which will have the specified relation (relatedPartyType) toward the primary customer.
For example, when defining a UBO relationship, the customer referred to in the relatedCustomerId will become the Ultimate Beneficial Owner of the customerId specified in the path.
To retrieve all existing relations to a customer, you can call the GET /customers/v2/customers/{customerId}/related-parties.
To remove a relation between two parties, you can use the DELETE /customers/v2/customers/{customerId}/related-parties/{relatedCustomerId} using the customerId of each party.