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looking at getting a mortgage as self employed what figure do we put down as earnings

Daniyella
Posts: 221 Forumite
in Cutting tax
My partner is self employed but he works under the construction industry scheme so is taxed at source now we are looking at getting a mortgage this year i have a question...
Say for example his earnings are £43000 before tax this year and £37000 last year will they go off £40k as the average or do they have a special way of working it out how much of a mortgage he can get?
Sorry if i sound a little bit stupid?
Say for example his earnings are £43000 before tax this year and £37000 last year will they go off £40k as the average or do they have a special way of working it out how much of a mortgage he can get?
Sorry if i sound a little bit stupid?
:staradmin Competition wins! :starmod:
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it should go on his net profit per the accounts, and normally he'll be asked for 3 years of these.Hideous Muddles from Right Charlies0
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They only want 2 years audited accounts, will be combined over the 2 years then?:staradmin Competition wins! :starmod:
John Frieda Hair products, £250 House of Fraser Giftcard, £250 Superbreak vouchers, Bblonde entire range,£100 Pets at Home Giftcard, Benefit Cosmetics, Peppa Pig goodiesThanks to everyone who posts!0 -
some lenders will average the 2 years, some will take the latest year. either way, they like to see earnings rising.0
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OP - be aware that 'earnings' means different things to different people. To avoid confusion lenders will use his net profit, after all expenses such as tools / clothing / travel / insurance have been deducted.
I say this because many times people think lenders want thier turnover.0 -
So it's his NET PROFIT? A:staradmin Competition wins! :starmod:
John Frieda Hair products, £250 House of Fraser Giftcard, £250 Superbreak vouchers, Bblonde entire range,£100 Pets at Home Giftcard, Benefit Cosmetics, Peppa Pig goodiesThanks to everyone who posts!0 -
They do not always need audited accounts. They might need just the accounts with an accountant's confirmation, a SA302 form from hmrc or even projected figures from a very trusted accountancy.
They can also check these figures with hmrc under the income verification scheme (so whatever you do, make sure you quote exactly what the tax return was).0
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