Need to move rental but self assessment salary is low (Company director) - Other ways?

derobe

Hi all, I've never rented as a company director which I became in 2021, previously I've always been in full time employment so haven't had a proof of income issue.

I am wanting to move to a new rental property for several reasons. My business has been trading since November 2021 and was profitable in the first year, however in order to grow there was a lot more invested in the following years and my self assesment that's just been submitted shows I only took £9900 in salary + £1000 in Dividends due to there only being a break even/marginal profit for the company during the 23-24 tax year.

At present I pay myself around £2500/£30k with the company still being profitable each month - I'd like to move to an apartment which is about £1000 per month which I can afford - however I'm not sure how I go about proving that with my only evidence from HMRC being a self assessment for 23/24 showing a salary of £10,990 for 23-24.

Does it just depend on the landlord/agent - are there any that will look at my last 3-6 months of bank statements for example instead of just my self assesment?

Many thanks in advance.

TroubledTarts

We do perform affordability tests but private landlords don't always and would accept bank statements/proof of salary payslips etc as affordability.

It really does depend but I would expect most estate agents to perform an affordability check and £2500 with a rent or £1000 may come out on the negative side.

Dazed_and_C0nfused

derobe said:

Hi all, I've never rented as a company director which I became in 2021, previously I've always been in full time employment so haven't had a proof of income issue.

I am wanting to move to a new rental property for several reasons. My business has been trading since November 2021 and was profitable in the first year, however in order to grow there was a lot more invested in the following years and my self assesment that's just been submitted shows I only took £9900 in salary + £1000 in Dividends due to there only being a break even/marginal profit for the company during the 23-24 tax year.

At present I pay myself around £2500/£30k with the company still being profitable each month - I'd like to move to an apartment which is about £1000 per month which I can afford - however I'm not sure how I go about proving that with my only evidence from HMRC being a self assessment for 23/24 showing a salary of £10,990 for 23-24.

Does it just depend on the landlord/agent - are there any that will look at my last 3-6 months of bank statements for example instead of just my self assesment?

Many thanks in advance.

That doesn't make sense.

Your Personal Tax Account will show details of the Real Time Information reports your employer (you) have been filing each month.

Whether that is acceptable evidence is a different question.

derobe

TroubledTarts said:

We do perform affordability tests but private landlords don't always and would accept bank statements/proof of salary payslips etc as affordability.

It really does depend but I would expect most estate agents to perform an affordability check and £2500 with a rent or £1000 may come out on the negative side.

Great, we'll avoid agents and look at dealing with private landlords.

gazfocus

Can you confirm whether, through your ltd company, are you paying your wage through PAYE? If so, your ltd company should be issuing you with a payslip each month and you should be able to back that up with the salary payments going into your bank. 

The general requirement is that your annual salary is equal to, or more than 36 times the monthly rent, so a property of £1,000/month would require a salary of £36,000. 

As has been said above, private landlords sometimes don’t have the same requirements and are more lenient…we rented a house from a private landlord once and the landlord didn’t even ask us what our jobs or income were. He literally showed us the house, told us the deposit and said if we liked the house it was ours. 

For private landlords, take a look on openrent (not all openrent properties end up on Rightmove). 

derobe

gazfocus said:

Can you confirm whether, through your ltd company, are you paying your wage through PAYE? If so, your ltd company should be issuing you with a payslip each month and you should be able to back that up with the salary payments going into your bank. 

The general requirement is that your annual salary is equal to, or more than 36 times the monthly rent, so a property of £1,000/month would require a salary of £36,000. 

As has been said above, private landlords sometimes don’t have the same requirements and are more lenient…we rented a house from a private landlord once and the landlord didn’t even ask us what our jobs or income were. He literally showed us the house, told us the deposit and said if we liked the house it was ours. 

For private landlords, take a look on openrent (not all openrent properties end up on Rightmove). 

No it's not going through PAYE unfortunately I know that would make it easier - I definitely paid myself a lot more than the £10,990 declared it was probably closer to £30k for that year as well but the accountant is able to show it as a low wage to avoid personal tax and NI is my understanding. 

From asking around and research online I'd seen annual salary needing to be 25x the monthly rent so if it is 36x that's going to be difficult but fingers crossed I can find someone

Yes I am checking openrent - not sure if there's any other portals out there... thinking gumtree or facebook marketplace too but it always seems there are many scammers operating on those platforms.

gazfocus

derobe said:

gazfocus said:

Can you confirm whether, through your ltd company, are you paying your wage through PAYE? If so, your ltd company should be issuing you with a payslip each month and you should be able to back that up with the salary payments going into your bank. 

The general requirement is that your annual salary is equal to, or more than 36 times the monthly rent, so a property of £1,000/month would require a salary of £36,000. 

As has been said above, private landlords sometimes don’t have the same requirements and are more lenient…we rented a house from a private landlord once and the landlord didn’t even ask us what our jobs or income were. He literally showed us the house, told us the deposit and said if we liked the house it was ours. 

For private landlords, take a look on openrent (not all openrent properties end up on Rightmove). 

No it's not going through PAYE unfortunately I know that would make it easier - I definitely paid myself a lot more than the £10,990 declared it was probably closer to £30k for that year as well but the accountant is able to show it as a low wage to avoid personal tax and NI is my understanding. 

From asking around and research online I'd seen annual salary needing to be 25x the monthly rent so if it is 36x that's going to be difficult but fingers crossed I can find someone

Yes I am checking openrent - not sure if there's any other portals out there... thinking gumtree or facebook marketplace too but it always seems there are many scammers operating on those platforms.

I’m not sure how your accountant is deducting your salary full stop without it being PAYE as the need for PAYE kicks in once you hit £123 per week salary so I’d love the details of your accountant to do our accounts haha. 

silvercar

gazfocus said:

derobe said:

gazfocus said:

Can you confirm whether, through your ltd company, are you paying your wage through PAYE? If so, your ltd company should be issuing you with a payslip each month and you should be able to back that up with the salary payments going into your bank. 

The general requirement is that your annual salary is equal to, or more than 36 times the monthly rent, so a property of £1,000/month would require a salary of £36,000. 

As has been said above, private landlords sometimes don’t have the same requirements and are more lenient…we rented a house from a private landlord once and the landlord didn’t even ask us what our jobs or income were. He literally showed us the house, told us the deposit and said if we liked the house it was ours. 

For private landlords, take a look on openrent (not all openrent properties end up on Rightmove). 

No it's not going through PAYE unfortunately I know that would make it easier - I definitely paid myself a lot more than the £10,990 declared it was probably closer to £30k for that year as well but the accountant is able to show it as a low wage to avoid personal tax and NI is my understanding. 

From asking around and research online I'd seen annual salary needing to be 25x the monthly rent so if it is 36x that's going to be difficult but fingers crossed I can find someone

Yes I am checking openrent - not sure if there's any other portals out there... thinking gumtree or facebook marketplace too but it always seems there are many scammers operating on those platforms.

I’m not sure how your accountant is deducting your salary full stop without it being PAYE as the need for PAYE kicks in once you hit £123 per week salary so I’d love the details of your accountant to do our accounts haha. 

Could be a mix of PAYE and dividends. ‘Without it being paye’ could be a short hand for saying tax isn’t paid under paye.

theartfullodger

If tenant (named on tenancy) is a company (sounds like it..) then in England the tenancy cannot be (legally) an AST.  Even if paperwork says it is. (Address, dates, amounts apply but other things don't...)

Do you understand the consequences?? Does the landlord ??  Bit of a minefield for landlord.

Do I presume you want to do this to avoid some tax?? 

horsewithnoname

derobe said:

gazfocus said:

Can you confirm whether, through your ltd company, are you paying your wage through PAYE? If so, your ltd company should be issuing you with a payslip each month and you should be able to back that up with the salary payments going into your bank. 

The general requirement is that your annual salary is equal to, or more than 36 times the monthly rent, so a property of £1,000/month would require a salary of £36,000. 

As has been said above, private landlords sometimes don’t have the same requirements and are more lenient…we rented a house from a private landlord once and the landlord didn’t even ask us what our jobs or income were. He literally showed us the house, told us the deposit and said if we liked the house it was ours. 

For private landlords, take a look on openrent (not all openrent properties end up on Rightmove). 

No it's not going through PAYE unfortunately I know that would make it easier - I definitely paid myself a lot more than the £10,990 declared it was probably closer to £30k for that year as well but the accountant is able to show it as a low wage to avoid personal tax and NI is my understanding. 

From asking around and research online I'd seen annual salary needing to be 25x the monthly rent so if it is 36x that's going to be difficult but fingers crossed I can find someone

Yes I am checking openrent - not sure if there's any other portals out there... thinking gumtree or facebook marketplace too but it always seems there are many scammers operating on those platforms.

Do you really want to be owning up to fiddling tax on a public forum?
Do everyone a favour and tell your accountant to honest 😡

Grumpy_chap

derobe said:. 

No it's not going through PAYE unfortunately I know that would make it easier - I definitely paid myself a lot more than the £10,990 declared it was probably closer to £30k for that year as well but the accountant is able to show it as a low wage to avoid personal tax and NI is my understanding. 

How have you paid yourself from your Ltd Co?
£11k as PAYE salary.
£30k in total, so that means £19k on top of the salary.
Was that £19k all dividends?
Did the £19k include any allowable expenses?
Was any of the £19k Director's Loan (loan to the Director from the Ltd Co)?

You are the Director of a Ltd Company so you need to know how these drawings have been recorded and declared.
If you do confirm how the drawings were taken, you may be able to find LL's and / or LA's that take into account your own Ltd Co salary plus dividend.
If you don't know how the drawings were taken, how do you expect any other party to assess your income and ability to pay rent?