Working Between PAYE and Schedule D - mortgage

worriedrenter

Hi all

I was wondering whether anyone can give me any help or advice. I am a media freelancer, and have been registered self-employed since the 2011-2012 tax year. Due to the nature of my industry, I work between PAYE contracts and Schedule D contracts (depending on the job role) but all go through my accountant and are processed for my tax return at the end of the year.

My mortgage broker has recently informed me that this mix of income will mean I find it difficult to get a mortgage. I was wondering why this is? I don't understand what the difference is between a short-term PAYE contract, and a short-term freelance contract?

My earnings are now well above the London average (I submit my third tax return in April 2014). I am buying with my partner, who is full-time on a permanent contract.

Does anyone know a) why it is the case and b) if there are any mortgage lenders willing to offer bespoke solutions for someone in my situation?

amnblog

You won't find it difficult to get a mortgage but you may find it difficult to find a mortgage broker to explain it to you properly!

Everything will be listed on your Sa302 so you need to obtain 3 years worth (or 2 if 3 not possible) from HMRC.

If you don't know how to get your sa302, pm me and I will send you a link.

worriedrenter

Thanks AMNBlog - I rang my accountant yesterday and they're sending through my SA302s for the last 2 years.

However, my broker said that even with these, it will be difficult to get a mortgage because of the mix of PAYE and Schedule D, and that only my Schedule D income would be taken into account. I'm really confused by it all - thought I was doing the right thing by registering properly and doing accounts each year!

amnblog

I cannot see why it's a problem.

amnblog

amnblog wrote: »

I cannot see why it's a problem.

Ask any of our Doctor clients on NHS employment contracts doing additional locum sessions on schedule D

pcgtron

worriedrenter wrote: »

Thanks AMNBlog - I rang my accountant yesterday and they're sending through my SA302s the last 2 years.

However, my broker said that even with these, it will be o get a mortgage because of the mix of PAYE and Schedule D, and that only my Schedule D income would be taken into account. I'm really confused by it all - thought I was doing the right thing by registering properly and doing accounts each year!

Get a better broker. I also work in your industry and used to have a mix ofpPAYE and ScheduleD. In fact, I got two mortgages with this mix of income. In the end, I had to explain the sa302 to my broker as he didn't understand but I had a rubbish broker and it still happened. To get an idea yourself, add the 3 years taxable income together and dividebby 3

kingstreet

An SA302 is a way of confirming your different types of income in one place, rather than payslips for PAYE and accounts for schedule D earnings.

Two source of income aren't unusual these days and lenders are usually pretty happy to accept different sources of income, as long as the evidence is available in an acceptable format, usually the SA302s for at least two years.