Self-employed & audited accounts for mortgage

R0nin

Hi

I hope this is the correct place to post, I wasn't quite sure which Forum to post this in.

In the near future my wife and I intend to move house, which will mean a mortgage application, and I'm aware of how difficult it can be now for self-employed folk to obtain one.

I've been self-employed (sole trader) for 2.5 years and have always filed my tax returns direct to HMRC and do not use an accountant or umbrella company or such like. I work for one client and I do not have any expenditure apart from travelling to sites. I don't even have a business bank account because I only invoice the 1 client.

Due to the imminent ruling from FSA regarding the self-employed and a requirement to provide at least 2 years of audited accounts in order to apply for a mortgage, what steps should I take to have everything in order?

Is/was anyone in a similar boat to me? If so what did you do or suggest?

Thrugelmir

R0nin wrote: »

I don't even have a business bank account because I only invoice the 1 client.

A passing thought. Do you meet the requirements of self employment?

Simon_gloster

HMRC notification via SA302's will do nicely.

3 years is the norm, so you'll probably fall foul of lending policy, but as an existing customer they should look beyond this point. Who is the lender?

Have you figures increase for the whole financial years you can provide?

The_Money_Man

I agree with post 2. My understanding of Inland Revenue rules is that normally you wouldn't be eligible for self employment under those circumstances. Anyway to answer your question 2 years SA302s which you can obtain from the IR will be enough to satisfy some lenders but not all.

harvey115

I agree you are not a Limited Company owner and only registered as self employed from HMRC point of view.

SA302 for all your self-employed years would be good enough as all earning from the route you are going through are going to be in that.

The lender may wish to see a contract with your client, maybe a fixed term contract or such to keep the risk low.

Hope this helps.

Dave_Ham

I concur, SA302's will be sufficient and there are lenders that will accept just 2 years SA302's...

You need to be careful being self employed with just one company though, as there is an IR ? where they are clamping down on this sort of arrangement...

All the best

R0nin

Wow! I'm very appreciative of your replies, very useful information and a relief too.

P.S. I will sort out the 1 client only thing

Gary123456790

Dave_Ham wrote: »

as there is an IR ?All the best

It is IR35.

If you are declaring your full income to HMRC and paying tax on it you should be OK - basically you should be paying tax like you were an employee.

As long as you're doing this, its likely that if it were looked into you'd be OK but the company employing you would be seen to be dodging tax, since they dont have to pay their part of national insurance. I cant say this for certain and would advise you to seek advice from an accountant but this is my view from experience.

Gary.