Self employed tax return not same as overview

COYI123

Someone please help , I am currently applying for a mortgage with my partner who is self employed (I’m employed ) . The lender has come back and asked why the amount of tax owed in the tax return is different to the amount on the overview . I’ve looked online and people are saying it is a common bug on the system , but the problem is , they can only send a paper copy by post and it can take over 3 weeks to come which we can’t wait ! I’ve explained this to my broker and they are trying to work out a way round it , but surely a lender can understand this ?

MattMattMattUK

COYI123 said:

Someone please help , I am currently applying for a mortgage with my partner who is self employed (I’m employed ) . The lender has come back and asked why the amount of tax owed in the tax return is different to the amount on the overview . I’ve looked online and people are saying it is a common bug on the system , but the problem is , they can only send a paper copy by post and it can take over 3 weeks to come which we can’t wait ! I’ve explained this to my broker and they are trying to work out a way round it , but surely a lender can understand this ?

I have just looked at my tax returns and they all match, so it seems slightly odd. I would guess from the lenders position the work around is that they wait for the paper copy, that verifies things and shows that the income is not being inflated. You might feel a time pressure, they likely do not care about a three week delay, but do care about an application being 100% accurate and verifiable. 

K_S

COYI123 said:

Someone please help , I am currently applying for a mortgage with my partner who is self employed (I’m employed ) . The lender has come back and asked why the amount of tax owed in the tax return is different to the amount on the overview . I’ve looked online and people are saying it is a common bug on the system , but the problem is , they can only send a paper copy by post and it can take over 3 weeks to come which we can’t wait ! I’ve explained this to my broker and they are trying to work out a way round it , but surely a lender can understand this ?

@COYI123 Assuming that you're talking about a difference in the SA302 Vs TYO, I'm copy pasting my response to a similar query. Hopefully it helps.

I don't know how to link to it, but if you want the whole conversation, just chk the ask me anything thread from 2nd June.

If you have an accountant, the lender may be willing to accept a representation from them.

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K_S said:

It's a tricky one unfortunately as the eventual outcome depends on the subjective opinion of the underwriter. 

I can't speak for your specific issue as I don't know anything about it but I'll give an example of a similar issue with the TYO (where the tax due figures don't match exactly with the SA302) and hopefully you can get something useful out of it.

The SA302 not matching TYO due to adjustments/overpayments/etc. is a much more common issue than lenders acknowledge and can arise due to a number of valid reasons. Where the underwriter (or processor) is simply refusing to accept any diff between the TYO and SA302, where I've had successes, it's from the client calling HMRC, explaining that they've having severe issues with a mortgage due to the discrepancy and getting a manual letter explaining the discrepancy, reconciling the numbers and then me packaging this evidence to the underwriter, pushing the BDM, trying to get it assigned to a senior underwriter, etc. to try and get a favourable outcome.

More often that not, it has worked but it may require a good bit of effort from yourself (getting someone to speak to at HMRC has got increasingly difficult over the recent past with all the cuts to staff numbers and customer lines), a big dollop of luck (you need them to be willing to draft a letter), time and effort from the broker and even after all that you could get an underwriter who simply isn't willing to budge.

Out of professional interest, if and when this reaches an end conclusion, It would be good if you could circle back and update us as to what happened.

I hope it gets sorted one way or the other, good luck!

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amnblog

Lenders will always have a problem if the tax due on the tax calculations does not match the figure on the Tax Year overview. The lender will often live with a discrepancy of under £250 but they can, of course, question anything.

This problem is fairly common and Accountants can typically sort it swiftly.

My view would be, get your Partner's Accountant to resolve this.

M9174852

Hi, Hope you were able to get it sorted, but the tax year overviews don't match in self employment where the payments are twice yearly, ie January and July, especially if there was a reduction in payments requested as HMRC will alter the payment schedule to support less tax being payed over the longer period of time. This can sometimes mean the screens online are not updated or don't show the actual scheduled payments until you log back in, say in April - it takes a few weeks to update their system in to show the required payment schedule.