Self Employed

Applicants must have been trading for a minimum period of 24 months

For self-employed applicants and company directors owning 33¹/³ % or more of the company, the following are required:-

• LTV < 75% – most recent three years accounts or SA302 documents and respective Tax Year Overviews
• LTV > 75% – most recent three years accounts and an accountants reference
• BTL Applications – latest year’s accounts or SA302 documents and respective Tax Year Overviews

Profits:

• Stable/increasing net profits: The average pre-tax net profit (or share of) from the latest 3 years accounts provided will be used to calculate income
• Unstable net profits (i.e. where profit increases and decreases over the three year period, or where profits increase or decrease by 20% or more from one year to the next): a satisfactory explanation must be received from the accountant. Where a satisfactory explanation is received the average of the latest 3 years most recent accounts will be used
• Declining net profits (more than 20% year on year) are not normally acceptable

The income of company directors will be based on the lower of either:

• an average of salary and dividend payments in the last 3 years, or
• the most recent year’s income

Where the applicants own 100% of the shares in a company then the residual net profit may also be taken into account

Verification:

• A statement from an accountant confirming the profits before tax for the last 3 years plus a projection is required in all cases where the loan to value exceeds 75%
• Acceptable Accountants qualifications are ACA, ACCA, ACMA, CPFA, FCA, FCCA, and FCMA. AFA or FFA will be acceptable where the LTV is under 50%. Other accountancy qualifications may be acceptable but would need to be referred for consideration

For professionals:
(Solicitors/Architects/Accountants/Dentists/Doctors/Surveyors/Pharmacists/Vets) a minimum of one years accounts are required as long as they have been working as part of an established partnership of at least two years standing. The maximum LTV will be restricted to 90%

Sub-Contractors:

• Sub-contractors must have been in that position for a minimum of 12 months and be able to prove income by reference to accounts prepared by a recognised accountant or by reference to HMRC documentation
• Employment through umbrella companies is acceptable under our sub-contractor criteria as detailed above

Construction Industry Scheme (CIS) Workers:

• Where an applicant is self-employed as a CIS worker, our sub-contractor criteria applies as detailed above