What do I need as proof of cash payment for mortgage

lmb1987

Hello all

I'm currently going through the process of applying for a mortgage. I'm self employed and get paid under the construction Industry scheme. I have done one private job that I got paid in cash for, what would I need to show the bank in terms of proof for that payment? Would it just be the invoice from me to the builder I did the work for or would I need a pay slip from them? Or both?

Cheers in advanced

Lee

[Deleted User]

If you are going to use income from out of CIS scheme then you will need to have declared it as income to hmrc and be able to prove that through your end kf year tax documents.
So if you took this payment after April 2019, you wont be able to use it until at least April next year and your 2019/2020 tax return has been done

lmb1987

Thanks for the reply. If I cant use it as earnings this year then I'm not too fussed as we can borrow enough without it. As its showing up on my bank statements will they not want to know where the cash has come from? Would just an invoice that I've sent the builder be enough as proof? I read somewhere that if a cash deposit is 25% or less then your average monthly earnings they usually question it but tend not to paper trail it. Obviously anything higher they want to start tracing where its come from. If this is the case then I may be ok as it's less than that, not sure how true that is though?

[Deleted User]

Deposit coming from work earnings is absolutely fine. They might ask for invoices if they go that intense. They can't ask for anything else as you aren't due to pay tax on it for another year at least.

That thing about 25% of earnings is nonsense. They will ask for deposit proof based on their own internal requirements. Don't tend to ask if it's 25% or more, leave it up to solicitors for the checks. If it's 100k deposit and you are 25 they will ask.
There isn't any real rules, just depends on who is underwriting the case

[Deleted User]

I may have misunderstood. Still stands though

I've had a lender question a £80 deposit recently. Just depends on the underwriter

lmb1987

Sorry I may have written it in a bit of a confusing way! All of my income is usually done through the cis scheme but i literally did one job privately that I got paid in cash which I paid into my bank, so I'm wondering whether it's worth asking the builder for a pay slip or if the invoice I did for him is enough for them. £1500 is probably enough for them to wonder where its come from, but surely they'd expect that with self employed people applying for a mortgage?

[Deleted User]

Yeah pretty much. Can't say I've ever had a lender question deposits into a tradesmans accounts unless it's like 20k or something.
I'd be very surprised if you had any issues with that

lmb1987

Thanks for your helpful replies, much appreciated during a very stressful time (eek!)