Opened up a company and on PAYE can I get a mortgage?

Jess0956

Hi, I've really found this forums useful, a family member has asked if anyone could help her.
She's recently opened up a company with a another partner and they both have own 50/50 of the company. The company still hasn't started making money but they have placed a lump of amount into there accounts so she can start working and go on PAYE.

Does she still qualify to get a mortgage? What would be required of her?

Look forward to your help.

ACG

Has she had advice from an accountant about that set up? It seems crazy to pay tax on money you have already presumably paid tax on.

In short however, the answer is no. Lenders would treat her as self employed and she would need to have been self employed for at least 1 year with an SA302 from HMRC.

Jess0956

Yes they have an accountant.
Why would she be treated as a self employed if she will be on a payroll?

00ec25

Jess0956 wrote: »

Yes they have an accountant.
Why would she be treated as a self employed if she will be on a payroll?

because she is the owner of the company and she controls what it does, so she employs herself...

the company has no financial history of its own to show it is able to support paying her a salary going forward. So on paper she has a deposit but no income.

amnblog

Total nonsense.

Whomever told her that would work has no idea what they are talking about.

As stated above, the business would need a minimum profitable 12 months track record for her to be able to raise any mortgage lending against any income from it.

A bit worrying for the 'business' if this is level of understanding they are working with.

ACG

Lenders tend to say anyone with a 25% or more share holding is treated as self employed.

The next question to that statement is what if we reduce shareholding and then put it back up... lenders have cottoned on to this.
Many lenders now do a companies house check as standard. If they can see you have been a major shareholder and now a minor shareholder/no shareholder you could find yourself put on the fraud watchlist. You could also be opening yourself up to CGT etc by swapping and changing the shareholding.

Jess0956

Thank you for answering all questions I will pass her on this information. Thank you