With many people looking to claim their spot on the housing ladder in 2018, it has never been more important to have easy access to a mortgage.
However, since HM Revenue & Customs (HMRC) changed the way it issues details of tax calculations and tax year overviews last year, for submission with mortgage applications, self-employed workers in the UK have been finding it harder to secure a mortgage.
Before 4 September 2017, self-employed workers and their accountants were able to obtain a paper copy of the form SA302 that lenders require in order to complete the mortgage application process.
Following the changes, HMRC now no longer issues paper copies and instead provides only digital versions, if HMRC’s free software has been used to complete and submit the tax return.
This has considerably restricted the number of lenders that will offer a mortgage to self-employed workers, with initial reports suggesting that lenders are still insisting on original paper copies as opposed to electronic printouts.
This is despite HMRC undertaking discussions with UK Finance, formerly the Council of Mortgage Lenders, about lenders’ requirements.
When submitting information, to satisfy those mortgage lenders who have adjusted their requirements, self-employed individuals and their advisers must now 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 page in order to act as a self-serve SA302.
Many accountants are therefore reminding self-employed individuals to check their lender’s requirements prior to making an application.
Tax Manager, Sarah Dixon, commented: “If you’re self-employed and you’ve set your sights on purchasing property in 2018, the changes to SA302’s are something you should be very aware of by now.
“It’s essential that you ascertain, early on in the process, whether or not your chosen lender will accept the self-serve SA302 so that you can proceed accordingly and hopefully avoid any unnecessary stumbling blocks at a later stage.”
A list of those mortgage lenders that will accept a self-serve SA302 can be found on the GOV.UK website here.
Whether you’re employed or self-employed, we offer a range of personal taxation services to suit your needs, eliminate unnecessary worry and save you time and money. We help our clients to navigate the complex web of rules and regulations that make up our tax system, we help them to identify opportunities to make worthwhile tax savings and we even deal with HMRC on their behalf, so that they can focus on running their business.
To discuss your circumstances with one of our team today, call us on 01767 315010 or fill in one of our online enquiry forms here.
LINK: SA302 Tax Calculation