Sole traders
Net profit from the tax calculation is the usual starting point. Lenders often average the last two years, and sometimes the last three. If the latest year is higher and the trend is sound, some will use that year alone.
The work
How we help
Our job is to put your income in front of a lender that gives you the best outcome — especially where salary and retained profits exceed the dividends drawn.
Limited companies
For a director or shareholder, many high-street lenders add the salary and the dividends on the personal tax calculation, and stop there. Some specialist and high-street lenders will instead use salary plus your percentage of the company’s profit after corporation tax.
That second figure is what you could have drawn. It is often higher precisely because the advice has been to leave profit in the company. It is an alternative to dividends, not an extra on top. Dividends have already come out of profit, so adding both would count the same money twice.
If you own 60%, the lender uses 60% of the post-tax profit, not 100%. We take the shareholding from the accounts or the confirmation statement, not from a round number.
| Item | Dividends | Profit share |
|---|---|---|
| Salary | Yes | Yes |
| Dividends taken | Yes | Not added again |
| Your % of profit after corporation tax | No | Yes |
| Turnover | No | No |
Partnerships and LLPs
Your share of net profit, in the proportion set out in the accounts or the agreement. We do not treat the whole partnership profit as yours unless you own all of it.
CIS
Tax is usually taken off before a CIS subcontractor is paid. The more flexible lenders use the gross on the vouchers, not that net. Many want 3 to 6 months of vouchers and matching bank statements. The most flexible use the latest 3 consecutive months.
What we usually need
Limited company
- Latest 2 years FULL trading accounts
- The % shareholding in the limited company, for each applicant
- SA302's, tax computations and tax year overviews (TYO) may be required
- Business and / or personal bank statements may be required
Sole trader
- Tax calculation and tax year overviews, usually for two years
- Accounts, if you have them
- Business and personal bank statements
- Proof of identity and address
Partnership or LLP
- Partnership or LLP accounts
- Your tax calculation and tax year overviews
- The agreement, if your share is not obvious from the accounts
- Bank statements, as that lender asks for them
CIS subcontractor
- CIS vouchers, usually covering 3 to 6 months, or the latest 3 consecutive months where the lender allows it
- Bank statements showing the same payments
- Vouchers issued by the contractor, not raised by you
- A tax computation only if that lender still assesses the tax return
Proof of identity and address is needed in every case, and the lender will ask for bank statements. We only request what that lender’s checklist needs.
The process
Step 1
Initial assessment
We take the basic facts: how you are paid, the deposit or equity, and whether you are buying, remortgaging or refinancing a rental.
Step 2
Lender fit
We tell you which approach is realistic — dividends, profit share, an average, or CIS — and which lenders will consider it.
Step 3
Agreement in principle
A credit check with a chosen lender, only once you have asked us to run one.
Step 4
Application
We submit the case and the documents, and answer the underwriter’s questions.
Step 5
Survey
The lender values the property and checks it is suitable security.
Step 6
Mortgage offer
The formal offer is the lender’s written confirmation. We go through it with you before you exchange.
A mortgage offer often follows within a few weeks of a complete application. It is not a fixed timetable. The survey, the underwriter and the documents all move it.
What this is not
We do not promise a higher loan. A profit-based assessment is only available from some lenders, and only where the accounts support it. Affordability, credit, the deposit and the property still apply. We do not give tax advice — that stays with your accountant. Our work is which lender will read the figures, and on what terms.
My Self Employed Mortgage is a trading style of My Financial Services Group Limited. FCA reference 717338.