Self Employed - first time buyer

Rebecaloureda

Hi,

Me and my partner are looking to get a mortgage as first time buyers.
However, my partner is self-employed and has is SA042. The lender has asked for his net profit. But I wondered could anyone tell me is it the Total income received or the Total in which tax is due, that they would use to assess what we could borrow?

Thanks,
Rebeca

amnblog

If he is a sole trader it will be his self employed income as stated on his tax calculations

Rebecaloureda

He’s not a sole trader. He’s a ground worker so he’s subcontracted I think.

MortgageMamma

Is he part of the CIS scheme?

Rebecaloureda

Yes he is part of the CIS scheme.

Rebecaloureda

I also meant he has his SA302.

kingstreet

If you choose to go the self-employed route, he will normally need two years trading figures, that would be SA302/Tax Calcs for 16/17 and 17/18, unless he does a quick return and gets 18/19 now.

He will also need Tax Year overviews for the same two years.

There are a handful of lenders taking one year self-employed but you won't have the pick of rates that way.

One lender takes latest three months remittances (and annualises the average) for CIS sub-contractors and often this produces a higher income and affordability.

Rebecaloureda

Thanks that’s great!

He has his SA302. Which figure would be taken off that? Is it total income received or total income tax is due?

He also does have his remittance as well which is fine.

Thanks!

Rick_Albright

You need this method:

This is what we did:
https://forums.moneysavingexpert.com/discussion/comment/74487668#Comment_74487668

Rebecaloureda

That’s helpful however that says he was a 100% shareholder/business owner. My partner is a subcontractor.