Question about my Mortgage application

jacknodes

Hello.....
Please could you possibly help me out with a current mortgage application that we have on going.

My partner and I are both first time buyers with 2 children and have had a decision in principle. When applying, we put across both salaries.

Me £1061pm take home. Just increased to (£1368.22) take home
Partner £550pm take home Part Time
Tax credits £275pm

I have the mortgage adviser coming in two days to collect all our information such as bank statements, payslips etc.
I have in the past few days been given a salary increase by my employer which has risen by £5000 per year. I have informed the mortgage company and tax credits of this and they have said they will take this into account.

I have been given a letter from my employer stating that from the start of the month I would be receiving the extra. I will also have a my payslips showing this going forward. If they contact HMRC they should be able to see this, but it has only just been changed but wouldn't be a problem as it will all be confirmed and above board with them.

I have been asked for my last 6 months bank statements, but these show more money in my account than i can account for.
For example my elderly mum was putting her savings aside and keeping it in her house as she doesn't have a bank account, so I created a saving account in my bank and put it in there for her. It shows £3300 of her money coming into my bank in march. Will they ask what this is??

Also my employer use to rent us a house but had to sell about a year ago, we use to pay a £350 rent for this property, but when he sold, he agreed for us to find a house and he would make up the short fall. Since then he has been paying us an extra £350 per month into my account. But the payments wasn't monthly at times he would deposit like £2000 into my account that would cover 6 months rent. I didn't pay tax on this as it wasn't part of my wage or anything like that. Will the underwriter ask why I have £2000 coming in at times and what its for? Will they also contact HRMC about this? As I believe it not to be taxable.

I have also been doing some freelance website developing work on the internet, where I get paid for web development work through paypal. so at times in the months I have £550 coming from pay pay. I think a couple of the months i have about £1500 coming from pay pal and another about £1750 from paypal. Will these be questioned by the underwriter and again passed to HMRC?

For example in the month of March i think i had about £8500 coming in to my bank account as my mum paid in her £3300 my payment paid £2000 to cover our 6 months rent and we had our salaries and tax credits and maybe a payment from pay pal.

Will HRMC be informed of what I have in my bank account and also the amounts, as the freelance work hasn't had tax paid on it as I haven't done it much just 3 or 4 times. Its not a regular thing or income.

I know that HMRC will need to be contacted as I have only just had the pay increase and won't have 3 payslips or the amounts showing on my bank stamens to confirm the increase. But will they question the large deposits and inform this to HMRC?

To me everything looks very suspicious, but I can account for all money apart from the paypal as there has been no tax paid on some of the paypal payments.

chanz4

"For example in the month of March i think i had about £8500 coming in to my bank account as my mum paid in her £3300 my payment paid £2000 to cover our 6 months rent and we had our salaries and tax credits and maybe a payment from pay pal.

Will HRMC be informed of what I have in my bank account and also the amounts, as the freelance work hasn't had tax paid on it as I haven't done it much just 3 or 4 times. Its not a regular thing or income.
"

If tax credits find out, your looking at fraud

witchy1066

why is your mother hiding money in your bank account, if this money would bring her over the threshold for claiming benefits then this also is fraud ,

why not go to a mortgage lender and explain it all to them like you have on this forum,
if all is above board, you have nothing to worry about , have you,

_Andy_

"the freelance work hasn't had tax paid on it as I haven't done it much just 3 or 4 times. Its not a regular thing or income."

Of course it's income. And yes you should be paying tax on it.

saverbuyer

Your employer has been paying part of your rent?

You need to look up "Benefit in Kind".

You and your employer could be looking at a significant tax bill and fine.

amnblog

A 'can of worms'.

Don't spend any money on your mortgage application until you have discussed all of this with your mortgage broker.

The lender could ask a number of questions here that you will find tricky to answer.

Rental payments not going out regularly
Lump sums coming into your account that are not your funds
Other bank deposits from other sources that appear to be income

All of these things make lenders nervous.

LurkerTurnedPoster

Have a look at Money Laundering Regulations and Proceeds Of Crime Act legislation as well. If you talk to a mortgage lender/advisor, they may be statutorily obliged to report your communications and not tell you - as this is tipping off.
I cant remember which act it is, and who has to do it and how professional privilige applies, not pretending to be an expert here or clever or anything - but as it looks like you have a load of undeclared income that HMRC would certainly like to receive the taxes on, and may decide that unexplained sums arriving in your account are income to also be taxed, you will want to spend the time I guess.

There is a taxationweb and accountingweb site - sorry, two sites that could help also. Between this site and those two there is very little you cannot discover - before the HMRC come a discovering, if you know what I mean.

Also worth checking out penalties and interest for unpaid tax.
Explanations like "My granny had it in a shoebox and gave it to me for me 'ouse" kind of play out like "My dog ate my homework" HMRC do not mess about and have encountered more flannel than you can poke a stick at.

LurkerTurnedPoster

And good luck, sorry, really mean that - all the best with it.
You may owe money, but if you can get straight and own your home then that is flag up the pole moment.

afly

A sit down chat with an accountant may be advisable also. They will at least let you know where you stand and very probably help you out for a few hundred quid

Thrugelmir

jacknodes wrote: »

I didn't pay tax on this as it wasn't part of my wage or anything like that.

The purpose of the money is irrelevant. Any money paid to you , except for reimbursement of expenses for example, is taxable. As forms part of your remuneration. If your employer has a payroll audit then don't be surprised if your affairs are also investigated.