Nature of Business Questions Explained: Why Tide Asks for More Detail During Sign-Up

“Nature of business” is a plain-English description of what the business actually does and how it makes money. It is usually broader than a product list and more specific than an industry label, because it needs to be detailed enough for a provider to understand the underlying activity.

In practice, providers use it to classify the business’s activity type, understand who the customers and counterparties are likely to be, and decide what “normal” account behaviour might look like once the account is active.

A one-line description can be too vague to verify quickly or to build a baseline activity profile. Tide itself says it may request more information for regulatory reasons and to build a projected profile that supports fraud protection, in I’ve been asked for more information about my Nature of Business.

Where the initial information is ambiguous, additional detail is effectively a way to reduce uncertainty. The follow-up is not necessarily a sign something is “wrong”; it can simply mean the initial wording is not specific enough for the provider’s internal classification and checks.

Common themes include what the business sells, whether it is already trading, how long it has been operating, and what turnover or transaction levels are expected. Providers also commonly ask about sales channels (online vs in-person), cash exposure, and where trading happens.

Tide’s own examples align to that structure: it highlights what the business will do, its age, current or projected turnover, and (as helpful detail) the expected online and cash components and where business is done, as described in I’ve been asked for more information about my Nature of Business.

Expected turnover and activity create an initial benchmark for what the provider expects to see on the account. When later activity differs sharply from what was declared, that divergence can generate questions because it may indicate a misunderstanding, a change in business model, or (in some cases) a financial-crime risk.

This approach is consistent with how monitoring is framed in regulatory guidance: customer relationship information helps firms judge whether transactions are consistent with what they understand about the customer. Regulation 28 explicitly links assessing the relationship’s purpose and intended nature to due diligence in The Money Laundering Regulations 2017: Regulation 28.

The channel mix (online vs in-person) and the cash proportion help explain the likely payment methods, settlement patterns, and fraud risks associated with the business. A business that expects meaningful cash handling can look different operationally and risk-wise from one that is purely card-not-present or invoice-based.

Guidance on customer due diligence and ongoing monitoring commonly treats transaction methods and expected patterns as relevant context for understanding risk and spotting anomalies over time; see JMLSG Guidance for the UK Financial Sector: Part I (amended July 2022).

Geography can affect both fraud risk and regulatory risk (for example, cross-border payment patterns, different counterparties, and sanctions screening considerations). Even where the business is UK-based, overseas customers or suppliers can materially change the expected transaction profile.

HMRC’s supervision handbook gives examples of the kinds of information that can inform the intended nature of the relationship, including whether transactions are UK-only or cross-border and which countries are involved; see ECSH33327 – The purpose and intended nature of the business relationship or transaction.

A broad description often triggers clarification questions because it does not tell the provider what the business actually does in a verifiable way. Terms like “services”, “consulting”, or “ecommerce” can cover a wide range of risk profiles and transaction patterns, so they may not be sufficient on their own.

Operationally, the likely outcome is a request for more narrative detail and sometimes supporting evidence. Where that process takes longer, it can move into a review workflow; see Tide account under review: stages, timelines and typical outcomes.

Sign-up answers tend to become part of the account’s baseline profile. If later activity diverges sharply (for example, different counterparties, different revenue model, different transaction frequency), it can create a “profile mismatch” that prompts questions.

That connection is one reason providers collect purpose-and-expected-activity information up front. For a Tide-specific lens on mismatch triggers, see Tide business model mismatch flags: when activity triggers a review and, for how these processes can evolve, Tide compliance review documents: what’s requested and why it repeats.

The themes are usually similar, but the verification trail can differ. A limited company may have Companies House filings that help validate the business identity and classification, while a sole trader may rely more on trading evidence and narrative descriptions, depending on the provider.

In both cases, the provider is trying to reach the same outcome: a credible understanding of what the business does and what account behaviour is likely. Where business type and structure affect acceptance, eligibility rules can become the gating factor; see Tide eligibility: business types that can and can’t apply.

“Restricted” typically means account functionality is limited while questions are resolved; “closed” means the relationship ends and services stop, subject to process and terms. The operational impact can be significant because restrictions can affect payments, payroll, supplier settlement, and tax flows.

For Tide-specific wording and practical impact, see Tide business account restricted vs closed: what it means and, for periodic re-checking dynamics more broadly, Periodic KYC refreshes: established SMEs and why accounts get rechecked.