Buying a house and applying for a mortgage can be a stressful time. Even more so if you can’t just rely on your last three payslips due to running your own business! Due to time required to gather records, accountants generally charge to help with mortgage requests. Given the current climate, if you want to keep your costs down here are some helpful hints!
WHAT IS NEEDED BY YOUR LENDER?
If you are self employed or have you own limited company and need to submit a Self Assessment then you will need to gather documents to prove your earnings to your mortgage lender. Usually they look for 2 – 3 years. Ask your broker or lender to confirm how many years they need.
The main documents are:
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Your Tax Calculation (known as SA302).
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Your Tax Year Overview; and
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Your Limited Company Accounts if applicable.
Your Tax Calculation (SA302)
This is basically an overview of your Self Assessment showing how your tax is calculated.
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If you complete your Self Assessment yourself directly with HMRC then you can print out your SA302 from your Government Gateway as per the instructions at the bottom of this article;
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If you use tax software then use this to print out your calculation
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If you use an accountant then check what they have sent you when finalising your Self Assessment – this should include the Tax Calculation. I use Taxfiler for mine and send over a document that includes the Tax Calculation near the end.
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Alternatively, ask your accountant for copies (but don’t be surprised if they charge for this service!).
Top Tip: If you use an accountant for your Self Assessment, make sure they send you a copy of the submitted return and Tax Calculation each year and file them on your computer for future mortgage needs. Saves the later charge and makes sure you can get them quickly.
Your Tax Year Overview
The Tax Year Overview is used as evidence to confirm the robustness of the Tax Calculation (I.e. backs up that your Self Assessment is what was last submitted to HMRC).
The Tax Year Overview can be printed out from your Government Gateway, as per the instructions below, if you have this set up for Self Assessment. If you use an accountant to submit your Self Assessment they can print it out for you (but again are likely to charge for the service).
Top Tip: Even if you use an accountant, get your Government Gateway sorted so you can access your Self Assessment details (and other taxes as relevant). This allows you easy (and free) access to the information held on you by HMRC as well as making it easier to authorise new accountants etc.
Director of a company limited by guarantee?
If you are a director of a company limited by guarantee e.g. business owner but not a shareholder then its worth speaking to your accountant about whether you can go down the employee route using payslips. It can take a bit of challenging the mortgage brokers/ lenders but I have successfully done this in the past and it can make a difference if your pay has recently increased.
Printing your Tax Calculation (SA302)
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Log in to your online Government Gateway account that you use to submit your Self Assessment.
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Follow the link ‘tax return options’.
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Choose the year from the drop down menu and click the ‘Go’ button.
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Select the ‘view return’ button.
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Follow the link ‘view calculation’ from the left hand navigation menu.
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Follow the link ‘view and print your calculation’ at the bottom of the page.
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Follow the link ‘print your full calculation’.
Printing your Tax Year Overview
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Log in to your online Government Gateway account.
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Follow the link ‘view account’.
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Follow the link ‘tax years’ from the left hand navigation menu.
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Choose the year from the drop down menu and click the ‘Go’ button.
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Follow the link ‘print your Tax Year Overview’.
You must wait 72 hours after fully sending a tax return until you can print your documents. Your accountant can do this all for you, if they have permission to act as your agent.