How much can i borrow? - Self employed.

grooster1

Hi,
I dont know if anybody will know the answer to this question or not but I need to basically know how much I can borrow. I know it goes on my net business profit but I also pay my wife a wage of £100 per week. This is the maximum per week without it affecting tax, as told by my accountant. This is her only job and does actually work for me.
What I need to know is, can this wage be taken into account when working out the multiples 3.5 x joint income or is this included in my profit already.

Thanks in advance for any help.

Cheers

Nick

luckyfool

How long have you been trading for? If the income goes through the books and your business has an accountant that can confirm both your and her income then there is no reason why not.

grooster1

Hi
yes I've been trading for 15 years now and have a chatered accountant. My wife has always previously worked until our second child and decided to give up and work for me. The wage goes through the books as a staff wage but only since March this year and only has 2 months payments in the newest set of accounts.
If this is possible what is there to stop me paying her say£300 and being able to get a higher mortgage?

Mrs_Bumble

Ok so you have 15 years accounts! What are your actual earnings as per your accountant? they are separate to what you are paying your wife?

A mortgage would be based on either your turnover for the last 3 years or your earnings for the last 3 years and your wifes are totally separate.

grooster1

It has always gone on my net profit in the business not earnings. If it went on turnover I would be laughing. Just need to know for definate whether my wides wage is seperate and can be counted as such or if it is counted in my net profit.

Mrs_Bumble

Your wife's wages are her wages, why would they count? Your net profit is after everything that is paid out isn't it? So your wife's wages are surely deducted from the gross profit to leave the net profit? Do you take a salary from the business?

grooster1

Yes I take a salary from the business. I am a sole trader, but the banks dont take this obviously when working out the multiples of the mortgage just the net profit of the business.