Please help - Deposit from Sole Trader earnings

Tiddlywinks

Have you factored in the cost of the accountant and the need to put aside money to cover the tax and NI for the business?

Have you remembered to keep a fund to support the maintenance of the property you are about to buy?

I would never recommend anyone spends all their savings on the deposit as you should always keep an emergency fund for unexpected repairs etc.

Also, don't forget the costs associated with buying: legal, stamp duty, removal costs etc.

macfanuk

Tiddlywinks wrote: »

Have you factored in the cost of the accountant and the need to put aside money to cover the tax and NI for the business?

Have you remembered to keep a fund to support the maintenance of the property you are about to buy?

I would never recommend anyone spends all their savings on the deposit as you should always keep an emergency fund for unexpected repairs etc.

Also, don't forget the costs associated with buying: legal, stamp duty, removal costs etc.

Hi Tiddlywinks. Thanks for your comments.

Yes, I have factored in the cost of the accountant and putting money aside for Tax and NI for the business. I also have other funds for the legal fees/stamp duty/removal costs, etc and that is all separate.

The house I'm looking at is fairly new and very well presented so maintenance will be minimal to begin with but it's definitely worth thinking about a 'reserve fund'. This could be something I build up in addition to the deposit throughout the time it takes for the purchase to go through

macfanuk

I was wondering if anyone could offer any advice.

Our mortgage adviser has got back to me today to say that I cannot use my income from Amazon & Play because:

a) There will be a tax liability on the income next year.
b) No way to verify the income/capital as being mine.

Can anyone PLEASE offer any suggestions as to how we might be able to get past this?

GMS

Thought the self employed income wasn't to be used as income for the mortgage?

You cannot use self employed income with only 5 months trading. The tax liability is irrelevant.

Is your PAYE income not sufficient to get the mortgage?

macfanuk

GMS wrote: »

Thought the self employed income wasn't to be used as income for the mortgage?

You cannot use self employed income with only 5 months trading. The tax liability is irrelevant.

Is your PAYE income not sufficient to get the mortgage?

Hi GMS,

I want to use the self employed income for the deposit only. As of 15th Jan I will have £25,000 in my bank that will have come from selling things on amazon and play. I don't want to use it for the affordability calculations.

My PAYE is fine for affordability.

macfanuk

anyone got any thoughts?

macfanuk

Has anyone got any thoughts on this or is this plan dead in the water?

pcgtron

I still don't see why you can't use it as a deposit. You must have a paper trail showing that the money is yours if you have sold things on those reputable websites. The income tax liabilit, wwhilst there is one should be of no concern to your mortgage advisor, although it should bea cconcern to you

macfanuk

pcgtron wrote: »

I still don't see why you can't use it as a deposit. You must have a paper trail showing that the money is yours if you have sold things on those reputable websites. The income tax liabilit, wwhilst there is one should be of no concern to your mortgage advisor, although it should bea cconcern to you

These are my thoughts exactly. Even if they said we could use the NET value of the sales as deposit, it wouldn't be the end of the world. The tax liability wouldn't be due until next January anyway so like you say, should be of no concern to the mortgage advisor.

Is this likely to be an issue that's come from the lenders rather than the mortgage advisor as I'm wondering whether it's worth approaching another advisor.

ethank

macfanuk wrote: »

I was wondering if anyone could offer any advice.

Our mortgage adviser has got back to me today to say that I cannot use my income from Amazon & Play because:

a) There will be a tax liability on the income next year.
b) No way to verify the income/capital as being mine.

Can anyone PLEASE offer any suggestions as to how we might be able to get past this?

Are they clear this was just for a deposit?