Turnover, gross profit or net profit for loan application?

gazid

When applying for a loan, obviously you need to enter your income.
As a self employed person I have three figures: Turn over, Gross Profit, Net Profit. Which should I use?

The loan company want to see an SA302 which is essentially a tax return which only shows my net profit, yet gross profit more accurately reflects my actual income and of course, makes me a better prospect for the loan.

Any advice appreciated. Thanks in advance.

Arleen

How would your gross profit be more accurate than net profit? It sure will be a higher number, but that doesn't make it more accurate - quite the opposite.

Gaz83

The only way gross profit could 'more accurately reflect your actual income' is if you're deliberately making it look to HMRC that you have more expenses than you do, to avoid paying as much tax as you shoudl be tax.

Ebe_Scrooge

gazid wrote: »

When applying for a loan, obviously you need to enter your income.
As a self employed person I have three figures: Turn over, Gross Profit, Net Profit. Which should I use?

The loan company want to see an SA302 which is essentially a tax return which only shows my net profit, yet gross profit more accurately reflects my actual income and of course, makes me a better prospect for the loan.

Any advice appreciated. Thanks in advance.

No, gross profit does not more accurately reflect your actual income. Turnover is what your company receives, take off company expenses and that gives you gross profit. Pay Corporation Tax on that, you're left with Net Profit. Unless, of course, you're not paying Corporation Tax ?

bengalknights

You would have to show net profit as this is actually what you "take home"

gazid

Ebe_Scrooge wrote: »

No, gross profit does not more accurately reflect your actual income. Turnover is what your company receives, take off company expenses and that gives you gross profit. Pay Corporation Tax on that, you're left with Net Profit. Unless, of course, you're not paying Corporation Tax ?

Hi, no, I'm not a Ltd company, just a sole trader.

ReadingTim

gazid wrote: »

When applying for a loan, obviously you need to enter your income.
As a self employed person I have three figures: Turn over, Gross Profit, Net Profit. Which should I use?

The loan company want to see an SA302 which is essentially a tax return which only shows my net profit, yet gross profit more accurately reflects my actual income and of course, makes me a better prospect for the loan.

Any advice appreciated. Thanks in advance.

The loan company have told you which figure to use - net profit.

My advice? Do as you're asked.

PeacefulWaters

It's possible to show a gross profit and make a loss.

Do as the lender says or commit fraud. Your choice.

SeanG79

I would submit a copy of the FULL annual accounts as produced by your accountant.

glennstar

Is this a commercial loan or a personal loan? If they want your SA302 then I would say it's a personal loan and as such your net is the only value of relevance.