Changes for self-employed people
Being self-employed brings many perks but like everything, there are sometimes challenges too. One of which materialises at the time of mortgage application. In case of an employed person, lenders are satisfied with just last 3 months bank statement and payslips.
Unfortunately, lenders are more sceptic about self-employed people. Usually, lenders require following for a self-employed person’s mortgage application:
- Tax overview – to ensure that the client does not owe anything to HMRC
- 2 years or more business accounts – to check the financial performance of the business
- Last 6 months bank statement – to check the management of personal finances
- Accountant’s letter – confirmation of income from the accountant (the accountant has to be a member of a recognised body like ACCA or ICAS)
- 2 years or more SA302 – tax calculation from HMRC and confirmation of annual income – THIS IS THE MOST IMPORTANT PIEVE OF THE PUZZLE
Recent Changes (No more SA302)
Now HMRC does not issue physical SA302 calculations and the alternatives are:
Downloading tax calculations using the personal online account
To register for this you will need information like bank account details, P60, recent payslips or passport details. But we have found that in few cases the clients were unable to set up the account.
Confirmation from your Qualified Accountant
Now HMRC has reached an agreement with the lenders and mostly all the lender should rely on the tax calculations from the accountants. Here is the list of all the lenders who will accept tax calculations from the accountants.
But ensure that your accountant is associated with a recognised body such as ACCA, ICAEW, ICAS etc.
We are members of ACCA and hold public practice certificate and can confirm our clients’ income by providing accountants reference or tax calculations.
If you have any question regarding your mortgage application, please contact us on 01417750070 or [email protected]