Rental Affordability - Working through a LTD Company?

Hover

I'm wondering how estate agents calculate how much rent a tenant can afford when the tenants are working through their LTD company.

Do they use the income of the LTD company or the salary and dividends paid to the individuals?

Here is the issue:

Me and my spouse work through our LTD company and are the only two directors.

As well as taking a salary from the LTD company, we also share the dividends 50/50.

For the last tax year, the LTD company had £46,000 gross profit (£51,000 turnover).

After all paying expenses, like accounts, corporation tax, we both received about £18,000 (salary + dividends).

We want to rent a house for personal use (not to do with the business).

Looking at the online rental affordability calculators, based on an income of £36,000 (2 x £18,000) we could afford £1,200.

However, if we used our LTD company gross profit of £46,000 it would be more.

Or even just included the corporation tax we paid of about £5,000, bringing the total to (£36,000 + £5,000) £41,000?

Would an estate agent look at the LTD company gross profit?

If we were employed in a regular job, I think our pre-tax income would be used for the calculation?

The properties we are looking at in our local area are about £1,400 per month.

Any one know anything about this? Do (high street) estate agents follow these affordability calculations?

Thanks.

Comms69

Hover wrote: »

I'm wondering how estate agents calculate how much rent a tenant can afford when the tenants are working through their LTD company.

Do they use the income of the LTD company or the salary and dividends paid to the individuals? - No, they look at the income from salary. (possibly dividents)

Here is the issue:

Me and my spouse work through our LTD company and are the only two directors.

As well as taking a salary from the LTD company, we also share the dividends 50/50.

For the last tax year, the LTD company had £46,000 gross profit (£51,000 turnover).

After all paying expenses, like accounts, corporation tax, we both received about £18,000 (salary + dividends).

We want to rent a house for personal use (not to do with the business).

Looking at the online rental affordability calculators, based on an income of £36,000 (2 x £18,000) we could afford £1,200.

However, if we used our LTD company gross profit of £46,000 it would be more.

Or even just included the corporation tax we paid of about £5,000, bringing the total to (£36,000 + £5,000) £41,000?

Would an estate agent look at the LTD company gross profit?

If we were employed in a regular job, I think our pre-tax income would be used for the calculation? - Have you paid tax on your £18,000?

The properties we are looking at in our local area are about £1,400 per month.

Any one know anything about this? Do (high street) estate agents follow these affordability calculations?

Thanks.

You cant use money in a LTD company as your own, it's not yours. So no it wont be considered.

Hover

Thanks.

Yes we both paid personal tax on the £18000.

Are estate agents strict on the affordability calculations?

Thanks again.