Self-employed workers in the UK have stated that they are finding it difficult to secure a mortgage, after HM Revenue & Customs (HMRC) made changes to the way it issues details of tax calculations and tax year overviews, known as form SA302, for submission alongside mortgage applications.
Until recently accountants and workers themselves have been able to acquire a paper copy of the SA302 form that lenders need to complete the mortgage application process.
However, from 4 September 2017 HMRC has confirmed that it will no longer issue paper copies.
This will make securing a mortgage more problematic for self-employed workers and may further limit the number of lenders that will offer a mortgage, with reports already coming in of lenders insisting on original paper copies rather than electronic printouts.
Self-employed individuals and their advisers will be required to supply the relevant year’s tax computation, printed from the adviser’s software, along with the tax year overview that advisers can print from HMRC’s online services website which, when combined, will act as a self-serve SA302 that will satisfy lenders.
HMRC has already undertaken discussions with UK Finance, formerly the Council of Mortgage Lenders, about lenders’ requirements. However, the list of lenders who have confirmed that they will accept self-serve SA302 forms omits some big high street names.
Many accountants are, therefore, reminding self-employed individuals to check their lender’s requirements early in the mortgage application process.
Sarah Dixon, Tax Manager at George Hay, commented: “If you’re self-employed and you’re currently in the process of applying for a mortgage, or otherwise thinking of applying for a mortgage, it is essential that you are aware of your chosen lenders requirements.
“If your lender happens to be one of those not willing to accept the self-serve SA302 then you could run into difficulty when it comes to securing your loan.”
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LINK: SA302 Tax Calculation