Mortgage self employed? Confused

Thompson24

Hi guys I've been working ina hairdressers for the past 3 years employed, however my boss has asked me if I want to go commision only which would see me better off.

However I was planning on getting a mortgage later this year and just thought, if I go self employed would that mean my chances of getting a mortgage would be zero then as I would be classed as self employed? As I say I have a three year history with this company so know my income could be more but I'm frightend I won't now be able to get a mortgage if I take my boss up on his offer. Would they look at my previous employment with this company or would I need three years account/?

ACG

You may not need 3 years account, a lot will depend on the size of your deposit (percentage wise), but it will become more difficult.

I was at a meeting today part of which covered the auto enrolment of pensions over the next couple of years... how much better off will you be? If not a huge amount, it might be worth sticking it out due to you getting yoru pension partially paid for.

Thompson24

I would be about 300 a week better off and have a 10% deposit

ACG

It will make it a lot lot easier if you stick to being employed then.

andyscott

How stable is the business that your working for as if your boss is asking if your wanting to become self employed and still work for them then this could be case of a business in trouble trying to get costs down.

if you go self employed then they dont have to supply any work at all.

have you considered going self employed and creating a ltd company and making your self an employee of the company. I know as an employee you dont need to have 3 years income.

ACG

As an employee of your own company your treated as exactly the same as being self employed.

Thompson24

No the business is doing great, the boss who's also my friend wants to give me the opportunity to be able to earn more and also obviously reduce his liability, however earning an extra £300 a week will def help me out but just worried I won't now get a mortgage?

andyscott

ACG wrote: »

As an employee of your own company your treated as exactly the same as being self employed.

What do you reckon is the best thing for someone to do looking to start a business but also looking to get a mortgage in near future?

Could they set up a ltd company in someone else name and become an employee then get a mortgage after a year before transferring shares back to themselves?

holly_hobby

I presume you'll be "renting a chair" - as such you will be classed as self employed (annual self assessment), and responsible for declaring your income and paying Tax and NI.

You do not need to go Ltd company unless your friend wants this arrangement due to proffesional indmenity issues (NB in respect of mges and if a controlling director of a Ltd Co, you are classed as self employed).

TBH, to save waiting at least 12 mths (more like 2 yrs TBH) with SA302s, then I would continue as an employee until you have your mge in place.

Hope this helps

Holly

holly_hobby

andyscott wrote: »

What do you reckon is the best thing for someone to do looking to start a business but also looking to get a mortgage in near future?

Could they set up a ltd company in someone else name and become an employee then get a mortgage after a year before transferring shares back to themselves?

That would essentially be a fraudulent application.

In that you are presenting yourself as an employee, when you are in reality the company owner and self employed.

Hope this helps

Holly

artbaron

Get your mortgage and then go self employed. That's what I did.