Self employed income

LA_EK

My husband has been a self-employed joiner for the past 12 years. Previously he was a sole-trader but just over a year ago he set up a limited company as he went to work for a house-builder as a contractor and this was one of their requirements for him getting the work.
He pays his tax via the HMRC CIS scheme, takes a small monthly salary and tops this up with dividends as and when needed and leaves the rest of the money in his business account. We would be looking to buy a property in around 6 months time and my questions are;
1) Should he be taking higher more regular payments out the business and have the excess money sit in our personal account rather that his business account?
2) Will lenders class him as only having one years accounts as the present Ltd company had only been trading just over a year or will they accept SA302s from when he was a sole trader?

We will be using a broker as I realise we will not be a straightforward case but if he needs to change the way he pays himself it would be better to know this now so we can show regular income coming in. If they just look at the amount on the SA302 then is it neither here nor there which account the money sits in?
Thanks in advance.

cns06

In general lenders look at 2 years SA302 and take the average of the 2 years. If the current year is a lot higher they may as for 3 years. It does vary lender to lender though.


Given we are well into the 15/16 tax year and you aim to get a mortgage in the next 6 months paying himself more wont help until April 16 when this years SA302 comes live.

kingstreet

He will have options as a CIS contractor using his last six months invoices and bank statements.

LA_EK

That's great, thanks for the replies- good to know we'll have options. Have been worried that its going to be a nightmare.

The current year will be higher as this new work is more lucrative plus he broke his leg last year and was off work for three months but this cant be helped I suppose!