Company Director - Self Employed or Employed?

RaggyDoll82

Hi

Myself and partner are going for our first mortgage but we already tried last year and failed at the final hurdle due to our new business.

Business has finally turned profit in its 3rd year and healthy growth. I remember last year we had an issue getting an SA302.

As it stands my partner is sole director of the company but the company employs him and all his income is PAYE he has had no dividends so can he still get an SA302?

As far as I have been lead to believe an SA302 relates to self employed income? It's getting confusing accountants say he is employed but eyes of a lender he is self employed?

Help?!

Welshbigman

We had a similar issue, I thought it would be straight forward, my wife and I are 50/50 shareholders in our limited company. Both of us draw a wage (PAYE) therefore we have payslips to prove income.
Most companies say as you are more than 20-25% shareholder you have a controlling interest and as such they will ask for SA302s. You might be aswell getting an accountant and accountants reference. Most mortgage companies want 3yrs accounts although some mortgage companies will work on 2yrs accounts (the odd one will work on 1yr).

They tend to work out the average over the last 3yrs (or 2yrs). So you maybe need to be cute about what you tell them.

amnblog

You need to be submitting self assessment tax returns to HMRC in order to obtain SA302s.


Some Company Directors who only take PAYE (no dividends) do not submit self assessment returns, although opinions seem to differ as to whether you should.


Therefore if you do not submit self assessment returns, you need your case supported by Accounts or an Accountants reference. This leaves your choice of Lenders slim.


A further complication is that some Lenders will treat you as Employed if you own less than 25% of the Company anyway.


These are some of the many reasons that self employed applicants are best served by applications via experienced mortgage brokers.