£25k income for BTL - before or after tax??

moatmeister

Hi

Looking at a possible BTL mortgage. Certain lenders state must have "a minimum annual income of £25,000"

Does anyone know if this means £25k earned before tax or after??

kingstreet

Always gross earnings for employees and net profit for the self-employed as these are the before tax figures in each case.

moatmeister

Thanks.
So just to be clear, in the case of being self employed, and based on a calculation such as this taken from the interweb:

Gross income (the money people pay you for your work) £30,000
The costs of running your business -£7,200
Net income (your profit, after deducting business costs) £22,800
Personal Allowance (this can change annually - see https://www.hmrc.gov.uk/rates/it.htm) -£6,475
Taxable income £16,325

The net profit would be taken as £22800 and therefore not qualify??

amnblog

Yes £22,800 in this case.

kingstreet

moatmeister wrote: »

Thanks.
So just to be clear, in the case of being self employed, and based on a calculation such as this taken from the interweb:

Gross income (the money people pay you for your work) £30,000
The costs of running your business -£7,200
Net income (your profit, after deducting business costs) £22,800
Personal Allowance (this can change annually - see https://www.hmrc.gov.uk/rates/it.htm) -£6,475
Taxable income £16,325

The net profit would be taken as £22800 and therefore not qualify??

What is shown there as 'gross income' is turnover.

moatmeister

Yes the terminology is very confusing when it is used inconsistantly and you dont deal with it on a day to day basis Its a expensive mistake to get wrong!

I have been looking at the Ipswich BS because I have been told they do manual underwriting and claim to champion "mortgage misfits" which I feel would be useful to me. Any experience of IBS?

kingstreet

No. Never needed to use them.