This is a very typical situation when you are a self employed contractor.
You've finished your accounts for the year.
Your accountant has deducted all your equipment, mobile phone costs and probably a few receipts for McDonalds for those 'away from home' expenses and now you have a nice low tax bill. However whether you are showing low net profit or you are a director of your own limited company and taking salary and dividend - the amount you are showing to the tax man is normally not a true reflection of your salary.
You now want to buy a house or remortgage your own and the bank or broker you are dealing with requests to see your last 2 years SA302's….the problem is at best case situation you can only borrow around 5 times your self employed income. As CISMortgage Advice our advisers fully understand your unique situation that you are more employed than you are self employed. Once you have had an initial free chat with one of our advisers, they will work out how much you can borrow on a mortgage based on your day contractual day rate. Most of customers are electricians, buildings, heating engineers, painters, carpenters or general self employed contractors. And we have successfully helped thousands obtain a mortgage even from the same high street banks that have turned them down in the first place. The most important factor when it comes to arranging your mortgage is not to treat you like a self employed worker. The mistake is made all too often.
As an example, lets say you day rate is £150 before your CIS (20%) tax deduction. The amount you can borrow would be based on an annual gross income of £39,000 (£150 x 5 days x 52 Weeks per year). Which you would probably appreciate is far greater than the self assessed income declared on your April HMRC returns.