Accounts needed for mortgage for self-employed?

therivierakid

My wife and I are hoping to move in the New Year. I am fully self employed and my wife has full time employment with a small self-employed income. Between us we're earning between £45-50k pa. We have a small amount of savings and a good amount of equity in the flat we currently live in.

SO my questions are: do I need to speak to an accountant about getting a set of accounts made up and if so, how much should I be paying? I'm a sole trader working on a cash basis and I've done my own self assessment tax returns for the past three years.

Thanks!

GMS

3 years worth of self assessment returns will be sufficient for proof of income with most lenders. If you have not got them already, request SA302 forms from the Revenue.

An accountant may be beneficial but not necessarily essential. If you know which lender you want to use ask what they require.

ACG

Some lenders will do it with 1 years accounts. But it is better that you get 2-3 years as it will open you up to more deals.

For a set of accounts it depends on how much work is involved. For example, i have all my income and expenditure on a spreadsheet for them to work it all out. I also keep a set of how many miles i have done.
For this i pay about £200-250. However if all you have are receipts in an envelope then you could be looking closer to £500. It all dpeends on how much work the accountant has to do. Also best to go with a chartered accountant - it costs more but ive seen lenders refuse accounts because they wernt chartered.

xyellowx

op most banks want 3 years as said above
a good accountant will want £400-£1400 depending on the volume of work required as mentioned above the spread sheets etc done by yourself will bring the cost down

a really good accountants bill shouldnt even be a issue as they should be saving you 4/5 times the bill

there are 2 types of accountants
1. number punching ones who hm rev customs love
2 ones who work for you and hm rev customs hate

finding the right ones the hard part

spadoosh

agree with GMS, as a sole trader you shouldnt be expected to have a published set of accounts. Your self assesment forms should be ample really, god enough for the tax man should be good enough for a bank.

Wouldnt bother with accountant unless a lender stipulates it. cant imagine. And anyone can sign off accounts upto an annual turnover of 6 mil or so (mightve changed, dont think it has) you could do it yourself anyway.

kingstreet

Nationwide criteria as an example;-

Accountant's Certificates
We will request an Accountant's Certificate for confirmation of income for self employed applicants. The certificate must be in our format and will be applied for by us, please supply the accountant's name and fax number.

From 1 December 2011, all Accountant's Certificates must be prepared and signed by a professionally qualified Associate or Fellow of one of the following bodies:

The Institute of Chartered Accountants (ACA/FCA)
The Association of Chartered Certified Accountants (ACCA/FCCA)
The Chartered Institute of Management Accountants (CIMA)
The Chartered Institute of Public Finance Accountancy (CIPFA)
The Association of Authorised Public Accountants (AAPA)
The Association of International Accountants (AIA)
The Chartered Institute of Taxation and Association of Taxation Technicians (CIOT/ATT)
The Institute of Chartered Accountants of Scotland (ICAS)
Chartered Accountants Ireland (CAI)
If the accountant does not have one of the above qualifications then the Accountant's Certificate cannot be accepted and the corresponding years SA302 tax assessments issued by HMRC must be used instead.

Addition - Alternatively, we can accept confirmation of income from HMRC, covering a 2 year period, in the form of a letter confirming the net profit, an official stamped Self Assessment (SA302) tax return, or an online SA302 (OUID) printed by the tax office and accompanied by covering letter from HMRC

therivierakid

Thanks for the advice everyone. We've found an accountant so we're hopefully going to get the accounts sorted straight after Christmas. Need to find a mortgage broker now!