SA302 – now you see it…
In 2011, self-certification mortgages were banned by the Financial Services Authority (since rebranded as the Financial Conduct Authority). The reason they were outlawed is that the regulators became concerned that borrowers were taking out mortgages on properties they had no long-term hope of affording.
Since then, mortgage lenders must run affordability checks on every mortgage application. The days of the Northern Rock 125% self-certified mortgage are long gone.
One major part of the affordability checks is being able to prove your income. The FCA requires lenders not to accept a mortgage applicant’s self-declaration of income without supporting documentation as proof of earnings.
Since this new requirement came in, many self-employed people and directors have used the SA302 form from HMRC to prove their income.
What is the SA302?
It’s a summary of the income you (or we on your behalf) report to HMRC. It’s that figure on which you pay income tax, National Insurance, dividend tax, and more. Because the HMRC have accepted the figure and issued a tax bill based upon that number, many mortgage providers consider that as acceptable proof backing up what you declare that you earn on the application form.
Unfortunately, from the 4th September 2017, HMRC stopped issuing paper copies of the SA302 tax calculations and tax year overviews statement.
And there’s nothing been put in place to cover the gap. So, what can you do?
End of SA302 – the following lenders accept documents you’ve printed off yourself as proof
|Aldermore||Cumberland Building Society||Jerrold Holdings||Newcastle Building Society||TSB|
|Bank of Ireland||Danske Bank||Kensington Mortgages||Nottingham Building Society||Teachers Building Society|
|Bank of Scotland||Darlington Building Society||Leeds Building Society||Platform||Tesco Bank|
|Barclays||Ecology Building Society||Lloyds Bank||Post Office Limited||Tipton & Coseley Building Society|
|Blemain Group||Furness Building Society||Loughborough Building Society||Precise Mortgages||Together Money|
|Birmingham Midshires||GE Money Home Lending||Market Harborough Building Society||Royal Bank of Scotland||Vernon Building Society|
|Britannia||Godiva Mortgages Ltd||Marsden Building Society||Saffron Building Society||Virgin Money|
|Cheltenham and Gloucester||HSBC||Mortgages plc||Santander||Wave Lending|
|Cheshire Mortgage Corporation||Halifax||National Counties Building Society||Scottish Building Society||West Bromwich Building Society|
|Clydesdale & Yorkshire Banks||Halifax Bank of Scotland||National Westminster Bank||Scottish Widows||Woolwich|
|Co-operative Bank||Holmesdale Building Society||Nationwide Building Society||St Andrews Group|
End of SA302 – what do these lenders actually accept?
Even though HMRC aren’t issuing any new SA302s, you can download your previous four years’ forms by logging in to your HMRC account, selecting “Self Assessment”, and then clicking on “More Self Assessment details”.
If you use Xero through us, we can print off your tax calculation and send it to you to forward to your lender or brokers. You’re also able to print off a tax year overview, again, by logging in to your HMRC account.
End of SA302 – what if your mortgage lender doesn’t accept self-printed documents?
The best thing to do in these circumstances is to contact HMRC. Ask them to send you past tax calculations or tax year overviews by post. Bear in mind that your copies may take up to two weeks to arrive.
End of SA302 – a bit of a mess
HMRC have withdrawn this service unilaterally. They have, according to their Tax Agents’ blog, been in touch with the mortgage lenders that make up UK Finance (formerly the Council of Mortgage Lenders) and they are “trying to understand (lenders’) requirements and the changes necessary to accept self-served copies of the tax calculation from the HMRC online account”.
Getting a mortgage is difficult. It’s twice as hard if you’re self-employed or a director. Unfortunately, this has made it a little bit harder again.
End of SA302 – can we help?
Although we’re not a mortgage broker, we’re on hand to help in any way we can to help you prove your income for lenders. Please call the team on 01235 768 561 or email email@example.com and let us know what you need.