Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

    • Will Eye Arm
    • By Will Eye Arm 16th Apr 18, 10:15 AM
    • 16Posts
    • 2Thanks
    Will Eye Arm
    Working through a LTD company - mortgage application?
    • #1
    • 16th Apr 18, 10:15 AM
    Working through a LTD company - mortgage application? 16th Apr 18 at 10:15 AM

    My Spouse and I both work through our LTD company. We take a salary from the company of 8000.

    Then the rest in dividends after the LTD company has paid expenses and corporation tax.

    If we were to apply for a mortgage, how would our income be calculated?

    Would they just look at the salary and the dividends?

    Or would the pre-tax income of the LTD company be taken into account? If not, would it be better to switch to regular self-employed status and not claim any expenses or pay corporation tax to have a higher income on paper?

    Say we both generate 45,000 per year of work through the LTD company but then claim things like working from home allowance, internet connection, accountant, etc as expenses of the LTD company. Then the LTD company pays the corporation tax.

    By the time the money reaches us, a big chunk, on paper, would've been eaten up by the LTD company.

    So it would appear we earn a lower amount.

    Whereas if we were self-employed, we'd both have 45,000 on our tax returns.

    We'd probably pay more tax if we were self-employed rather than working through a LTD company. But our income would look higher on paper.

    Is this how it works? Or can the same income be reported when working through a LTD company?

    Many thanks!
Page 1
    • MortgageMamma
    • By MortgageMamma 16th Apr 18, 10:19 AM
    • 6,196 Posts
    • 3,057 Thanks
    • #2
    • 16th Apr 18, 10:19 AM
    • #2
    • 16th Apr 18, 10:19 AM
    For self employed Ltd co directors most mortgage lenders look at salary plus dividend income (sometimes only a percentage of that) as your actual income.

    Other lenders will look at your last three years net profit and your share of that net profit for income whether drawn or not.

    Some lenders ask for both.

    Very much depends on the lender. Get some professional advice.
    Hi there! Weve had to remove your signature. Please check the Forum Rules if youre unsure why its been removed and, if still unsure, email
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

142Posts Today

1,112Users online

Martin's Twitter