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More Mortgage Application Trouble for Contractors


This month a study revealed that the biggest dilemma for UK self-employed contractors was to get a mortgage. 

The poll by PCG, the leading professional association that represents freelancers and contractors, found that many self-employed Brits’ personal finances are affected but 38% of contractors surveyed confessed that the biggest struggle was the battle to get a mortgage.

According to the findings, a mortgage is the main barrier that contractors have to overcome because it causes trouble when proof of salary by an employer is required. 

However, this obstacle is only said to get worse due to the recently launched Mortgage Verification Scheme. Under this scheme, mortgage lenders who suspect that an applicant has provided fake income figures to boost their borrowing power can pass the detail onto HM Revenue & Customs for a cross-check.

Contractors who make income declarations to mortgage lenders that don’t correlate with figures on tax return forms to HMRC can face an investigation. 

MVS is intended to help lenders pick out fraudulent mortgage applications and therefore help them lend more responsibly. It also gives the taxman the opportunity to ensure data given by freelancers is accurate. 

It is reported that the data exchanged with lenders and HMRC should only be limited however, advice has been issued that it doesn’t necessarily mean going to a second lender if you have been rejected by another because “sophisticated systems” mean that most mortgage lenders share such info. 

If you are self-employed and need advice regarding tax paperwork, mortgage applying and legislation such as IR35 and AWR, get in touch with Nixon Williams today. 

Why Choose Nixon Williams?

Nixon Williams provides fixed fee accountancy packages for contractors, freelancers, locums and consultants. Our friendly, low-cost service takes the stress out of accounting, taxation and any other financial issues that contractors may experience. For just £95 per month plus VAT our service includes:

  • Your own dedicated accountant including their direct telephone number and email address
  • Unlimited telephone and email support
  • Ongoing bookkeeping or access to our online accounting portal, Vantage
  • Handling general correspondence and queries with HM Revenue and Customs
  • Free company formation at Companies House
  • Assistance with opening a business bank account
  • Ongoing tax advice throughout the year
  • Completion of any personal taxation requirements
  • Calculation and advice on VAT returns and payments
  • Calculation and advice on PAYE payments
  • 98% of our accounting staff have either completed or are studying towards one of the following qualifications: ACMA, ACCA, CTA, ATT or AAT.

If you have any questions about contracting, becoming a contractor, starting a limited company or Nixon Williams, please contact our new business team on telephone number: 01253 362062 or email: craig.whelan@nixonwilliams.com.

 

To appoint Nixon Williams as your accountants, please complete our simple client agreement form.

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