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  • FIRST POST
    wj209980
    I'm employed, fiancee is self-employed with 5 years "unaudited" accounts...
    • #1
    • 31st Oct 09, 3:58 PM
    I'm employed, fiancee is self-employed with 5 years "unaudited" accounts... 31st Oct 09 at 3:58 PM
    Hi

    I'm employed, and have been with the same company for over 6 years.

    My fiancee is self-employed, and has been for over 5 years. Her accounts are compiled each year by a chartered accountant. On the front cover of each year's accounts it states they are "unaudited".

    We both have a personal account each, and a joint account, with the same bank. My fiancee's business account is also with the same bank. Our current mortgage is also with this same bank.

    We have just sold our house, and had our offer on a new house accepted. We wish to stay with the same bank for the new mortgage, and we have the appointment with the mortgage manager on monday.

    I have just come across something which could bring the whole thing crashing down though. When I did the mortgage "agreement in principle" a few weeeks back, I said upfront that my fiancee was self-employed and asked whether it would impact our application. I was asked whether she had "3 years worth of accounts" to which I replied "yes". I was then advised it would not be a problem.

    I was just looking at the check-list for things I need to take on Monday and it says "if self employed, 3 years of audited accounts". Whilst getting this information together, I noticed that the accounts are in fact "unaudited".

    Is this going to present itself as an issue? The income of my fiancee will be requirerd for us to borrow as much as we need (i.e. my salary on its own would not be enough).
Page 1
  • koexelek
    • #2
    • 31st Oct 09, 4:27 PM
    • #2
    • 31st Oct 09, 4:27 PM
    If you have the Inland Revenue documents to back up the accounts ( SA302's I think ?) that should be OK for the lender.
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • wj209980
    • #3
    • 31st Oct 09, 4:30 PM
    • #3
    • 31st Oct 09, 4:30 PM
    Hi

    Thanks for the reply.

    Are the documents you're referring to the Statment of Accounts i.e. the ones showing how much tax you've paid etc?
  • koexelek
    • #4
    • 31st Oct 09, 4:48 PM
    • #4
    • 31st Oct 09, 4:48 PM
    Hi

    Thanks for the reply.

    Are the documents you're referring to the Statment of Accounts i.e. the ones showing how much tax you've paid etc?
    Originally posted by wj209980
    Yes.

    A lender will normally lend on the figure you have paid tax on. If you've paid tax on the income, I'm sure most lenders will be happy to use it


    If a certified or chartered accountant has produced audited accounts for you, they will normally take their word for it.
    If not though, they will want the Inland Revenue forms.
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • wj209980
    • #5
    • 31st Oct 09, 6:37 PM
    • #5
    • 31st Oct 09, 6:37 PM
    Yes.

    A lender will normally lend on the figure you have paid tax on. If you've paid tax on the income, I'm sure most lenders will be happy to use it


    If a certified or chartered accountant has produced audited accounts for you, they will normally take their word for it.
    If not though, they will want the Inland Revenue forms.
    Originally posted by koexelek
    I really hope we'll be okay. I'll just take the HMRC statements through which state how much tax was paid.

    The accounts were produced by a chartered accountant (this applies to every year since she opened her business) but on the fron it does say "Unaudited Accounts for xxxxxx". I just hope they don't refuse to accept it.
  • mattmanchester
    • #6
    • 31st Oct 09, 7:37 PM
    • #6
    • 31st Oct 09, 7:37 PM
    I really hope we'll be okay. I'll just take the HMRC statements through which state how much tax was paid.
    .
    Originally posted by wj209980
    The statements of account are slightly different, and I dont think that's acceptable to lenders (something I wish I had been told by First Direct when I sent them 3 years submitted tax returns and statements of account)

    However, the lender should definately accept SA302 letters (those are the ones which tell you the detailed breakdown and working out of your tax). If you submit your tax return online with HMRC, they do not automatically send you these each year, so I just requested 5 years worth last week and HMRC sent them within a day.

    Hope you get your mortgage easily sorted,
    Matt.
  • wj209980
    • #7
    • 31st Oct 09, 8:25 PM
    • #7
    • 31st Oct 09, 8:25 PM
    The statements of account are slightly different, and I dont think that's acceptable to lenders (something I wish I had been told by First Direct when I sent them 3 years submitted tax returns and statements of account)

    However, the lender should definately accept SA302 letters (those are the ones which tell you the detailed breakdown and working out of your tax). If you submit your tax return online with HMRC, they do not automatically send you these each year, so I just requested 5 years worth last week and HMRC sent them within a day.

    Hope you get your mortgage easily sorted,
    Matt.
    Originally posted by mattmanchester
    Our accountant alwyas submits the tax return, and I don't believe I've ever seen an SA302 letter. Our mortgage appointment is on Monday so I won't be able to get hold of them by then.

    Will the fact that the accounts are produced each year by a chartered acountant be enough do you think, even though it says "unaudited" on the front?
  • DVardysShadow
    • #8
    • 31st Oct 09, 9:00 PM
    • #8
    • 31st Oct 09, 9:00 PM
    .. Will the fact that the accounts are produced each year by a chartered acountant be enough do you think, even though it says "unaudited" on the front?
    Originally posted by wj209980
    If the chartered accountant has signed them off, then getting them audited should not produce too many headaches.
  • wj209980
    • #9
    • 1st Nov 09, 7:51 AM
    • #9
    • 1st Nov 09, 7:51 AM
    Okay well, as our mortgage appointment is on Monday, I'll just have to take what i've got now and hope for the best. If they don't accept it then I'll have to progess what I can whilst I'm there and then provide them with an audited version of the accounts as soon as I can (it's just going to hold things up and be an additional cost but I guess that's life hey!)

    I would have thought though that common sense would mean that providing the HMRC tax invoices (with proof of payment) would be sufficient. After all, it proves that we have declared xxx amount of profit on which we need to pay tax over a number of years - why else would we effectively be asking the government to charge us tax if we hadn't earned the income?
  • Timmne
    Unaudited accounts are the norm for small businesses; unless your fianc!e is turning over many hundreds of thousands each year then I doubt an accountant would want to audit them- I certainly wouldn't. She can request an audit whatever the weather but they are not quick and cost anywhere from a couple of grand and that's for a very basic one!

    Essentially, don't be put off by the unaudited bit, they'll be the same as 99% of small business' accounts.
  • wj209980
    Unaudited accounts are the norm for small businesses; unless your fianc!e is turning over many hundreds of thousands each year then I doubt an accountant would want to audit them- I certainly wouldn't. She can request an audit whatever the weather but they are not quick and cost anywhere from a couple of grand and that's for a very basic one!

    Essentially, don't be put off by the unaudited bit, they'll be the same as 99% of small business' accounts.
    Originally posted by Timmne
    Hi Timmne

    Thanks for this, it gives me a bit more confidence! And my fiancee certianly isn't turning over hunderds of thousands - wish she was though lol!

    Anyway, to cover me as much as I can i'm going to take all manner of documents with me.
  • anxious first time buyer
    Unaudited accounts are the norm for small businesses; unless your fianc!e is turning over many hundreds of thousands each year then I doubt an accountant would want to audit them- I certainly wouldn't. She can request an audit whatever the weather but they are not quick and cost anywhere from a couple of grand and that's for a very basic one!

    Essentially, don't be put off by the unaudited bit, they'll be the same as 99% of small business' accounts.
    Originally posted by Timmne
    Thank you for this advise.

    I have been self-employed (sole trader) for 5 years and have unaudited accounts as well.

    I applied a FTB mortgage with NatWest on the 08th Oct but did not have any update until last thursday 29th Oct. They did not ask for the "audit" accounts but only ask me if I have any outstanding balances on credit cards or loan and if have any ccjs or defaults.

    I am worried that the next thing they will ask is the proof of audit accounts because this application has now been taken so long to approve.
  • wj209980
    Thanks for this info - maybe they won't request audited accounts from us then.

    Whatever the case I'll update here tomorrow afternoon when I get back from the mortgage appointment.
  • herbiesjp
    The accounts you have submitted via the accountant will be fine

    So you can relax about the accounts situation - if the lender asks for the SA302s, then you can request these from HMRC, but the accounts should suffice.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • wj209980
    The accounts you have submitted via the accountant will be fine

    So you can relax about the accounts situation - if the lender asks for the SA302s, then you can request these from HMRC, but the accounts should suffice.
    Originally posted by herbiesjp
    Thank you for your reply!! Now I do feel more relaxed!

    And, like you say, if they ask for the SA302s then I guess it isn't the end of the world - I can request these from the HMRC and pass them on.

    Thanks again
  • wj209980
    Hi

    Just to update you on the mortgage appointment today...

    The session went smoothly. The mortgage manager never questioned the fact that the accounts were "unaudited". However, when it came to give us a decision (based on the computer output) we were told it had been referred to the underwriters becuase:

    1) My finacee is self employed, and the self employed will always get referred and

    2) The amount we need to borrow is close to 90% LTV (it is actually around 86%, and the product we were going for allows 90%).

    We were told that there was no question over affordability, and the referral was nothing to worry about becuase it was simply due to the above two points. We were told we should hear the result either Thursday or Friday.

    I want to feel okay, but there is still that doubt in my mind. Has anybody had similar experiences, or can anyone give their thoughts on whether they think we will be okay?
  • anxious first time buyer
    Hi

    Just to update you on the mortgage appointment today...

    The session went smoothly. The mortgage manager never questioned the fact that the accounts were "unaudited". However, when it came to give us a decision (based on the computer output) we were told it had been referred to the underwriters becuase:

    1) My finacee is self employed, and the self employed will always get referred and

    2) The amount we need to borrow is close to 90% LTV (it is actually around 86%, and the product we were going for allows 90%).

    We were told that there was no question over affordability, and the referral was nothing to worry about becuase it was simply due to the above two points. We were told we should hear the result either Thursday or Friday.

    I want to feel okay, but there is still that doubt in my mind. Has anybody had similar experiences, or can anyone give their thoughts on whether they think we will be okay?
    Originally posted by wj209980
    I think I have a situation similar like you. I am also self-employed, need to borrow 80% LTV. I applied directly through NatWest on the 08/10. I have passed the credit check on that day but my application until now is still with the UNDERWRITERS...

    I don't think I can wait any longer so apply for Abbey yesterday and all they need are 2yrs signed accounts. Hopefully it will be quicker than NatWest.

    I think most of the banks just got a thing with Self-Employed. That is so unfair.

    Anyway, good luck with your application!
  • dunstonh
    "if self employed, 3 years of audited accounts".
    Thats a stupid request. Self employed dont need and are not required to get audited accounts. That is for limited companies. and plcs. There probably isnt a self employed person out there with audited accounts.

    The problem is that many front line bank staff dont know what unaudited actually means.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • wj209980
    Hi all

    Just thought i'd update you on the outcome...

    I had a call today around 4pm to inform me that the mortgage application has been approved

    Not once was the fact the accounts were "unaudited" questioned. And not once have I been asked for anything other than the yearly accounts I provided to the mortgage manager (no tax returns, or SA302's, just the accounts). Yes the application was referred to the underwriters, but this is apparantly common practice when one of the applicants is self employed.

    I'd just like to say thank you to everyone for their comments, and helping put my mind at rest in the lead up to my mortgage appointment.
  • herbiesjp
    There you go !

    Good luck on the house buying journey
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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