Paying a Direct Debit to HMRC... problems?

manub

My situation: I'm an IT contractor and I've got an offer accepted on a house. Due to the nature of my work and to my financial situation, I'm applying for a mortgage via a specialised broker (few colleagues in my situation did exactly that and they were successful). I'm borrowing a lower amount than the one set in my AIP.

My credit score is quite good: although I've been living in the country only for 3 years and a half, I never had any defaults / ccjs etc. I have 2 active credit cards which I pay in full every month plus the normal bills (never missed any payment) and overdrafts (sparely used and only more than a year ago - always inside the limit).

At the moment I have a direct debit pending with HMRC as a result of some underpaid income tax. The DD will expire in 3 months. The amount is negligible compared to my income and it's roughly 10% of the mortgage monthly amount.

Do you think this could impact negatively on my application? I don't think so - but I'm not sure if it's worth to call HMRC and ask them to pay the amount in full before my application gets processed.

Thanks!

kingstreet

Halifax, presumably?

Work on your day rate and will lend to visa holders with no evidence required, if borrowing under 75%.

Unlikely to request bank statements, so probably not an issue.

manub

I'm borrowing 95% of the value - EU citizen.

Halifax - yes. I know they will need my bank statement.

dimbo61

Why not just ring HMRC and clear the debt now, then you will not need to explain why you have a DD going to HMRC (Even if only for three months)
You are self-employed Yes? and not having the money saved to pay your tax bill while applying for a 95% mortgage might ring alarm bells.

manub

My idea was to clear the bill. However that was before I started my company (my last employer messed up my tax code) - I have the equities to pay last year self assessment. But regardless, I think you're right about paying the bill in full. Hopefully I can get hold of HMRC...