Proof of income from HMRC

helpmewithmymortgage

I am trying to get a residential mortgage and desperate for advice.

I work for the family business. It is a limited company and I have been employed on PAYE for the past two years. Yet despite giving my last year's P60 plus payslips the bank (Leeds Building Society) is now asking for proof of earnings from HMRC.

Someone said it could be they need an SA302? but I thought you only got this if you were self employed and I am not?? How else can I prove my income?

betmunch

Ignore what "someone" said. Find out what the lender will accept.

If you went via a broker its his job, if not it's yours

helpmewithmymortgage

I am applying directly. But that is good advice to ask them what they need.

I am feeling depressed with it all as I have sent every bank statement possible. I have a good deposit - half saved myself and half gifted from my mum - I have never been overdrawn, no debts, no student loans etc. Valuation has come back fine and with the DIP they said they would be prepared to offer me almost £100K more than I am asking for. But I feel I am being penalised because I work in the family business.

Could the fact I work in the family business stop me getting a mortgage? I am qualified with a degree to do my job and could work elsewhere if I wanted!

Anyway thank you and I will ring them.

betmunch

Working in a family business is something I would check prior to application.

It won't stop you getting a mortgage, but it's something that many lenders will get difficult over as its easy to abuse.

helpmewithmymortgage

The fact I wasn't asked this as the extensive interviews (three) I had is what I am most disappointed about. I have nothing to hide and if I'd been asked about this I would have said.

Is there anything else you think I could do to allay their fears? I plan to enclose my degree qualification to show that I am a professional and the bottom line is I could easily get another job with any company paying the same money or even higher.

I am worried now.

MacMickster

I suspect that the fact that you are (or in their eyes claim to be) employed by a family business means that there are opportunities to get false documentation to prove your income. If the same income has been reported to HMRC for the last couple of years then it proves that the P60 and payslips have not just been "manufactured" recently.

Have you not been able to provide bank statements showing your salary being paid each month?

Most taxpayers should have received a tax statement for the last tax year detailing their income according to HMRC records, even if they haven't completed a tax return. If you have this then it may be acceptable proof for your lender, but as has already been suggested ask your lender exactly what they need from you.

helpmewithmymortgage

I also checked their criteria before I applied and it said employed in family business treat as employed.

betmunch

Just ask them what they want and supply it.

That is all, no more no less.

helpmewithmymortgage

MacMister I have supplied P60 showing employed income for last year from the company, I have also sent them the last three months payslips, bank statements showing my salary going in, credit card statements as I use that for some expenses such as fuel (which I get paid back). I have also sent three months savings account where they can see savings going into it from my current account.

I have never checked my credit score but assume it must be fine as my dip was approved without problem and they said they could lend me much more than I am asking for.

My salary is done by an independent payroll company whose details they have and obviously there is the accountant who will verify everything.

Any other advice very gratefully received.

I am going to look for the tax statement - it might be something I just filed away and didn't really look at.

csgohan4

Too late for a broker to give it a go?

helpmewithmymortgage

I am buying a new build flat and the developer is expecting me to exchange soon. I am very worried that this is all taking a long time. I could have supplied all these documents weeks ago if I'd been asked. If I thought a broker could sort this faster then I would go with one. Since my last response earlier - and on the advice given on here - I rang LBS and asked what they require. The guy I spoke to looked at my notes and said everything looks fine. He doesn't understand why the underwriter has asked for this. He is going to find out on Monday and let me know.

Bearing in mind I am a professional (I have a degree and qualifications in the industry I work in), have saved up almost £20K deposit from my own salary, have zero debt, never been in any overdraft in my entire life (I am aged 28), never defaulted or not paid any loan ever, pay off my credit card in full every month and so on - bit of a worry for many people if banks are going to turn someone down just because they work in the family business (which by the way is thriving, gives many other people a living and pays all its taxes!)