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So confused about mortgage & tax

2 replies

sweetclems · 19/04/2021 21:36

Posting for traffic...

I'm self-employed and hoping to get a right to buy mortgage. I have a poor credit score after getting into financial struggles after leaving exDH domestic violence situation.
I'm in a far better position now and earning enough to cover a mortgage. Especially as I have DP living with me who is also earning full time but he's unable to get a mortgage at present.

I need to submit my 20/21 tax return so I have proof of income for the mortgage application however I'm torn about what figures to add as my expenses.

Done correctly, my expenses leave me with less profit so I was thinking I could lower my expenses, pay more tax (begrudgingly) but increase my profit and chances of getting a mortgage.

Not sure what's best to do here. I'm sure HMRC won't mind paying more tax, but will the mortgage company prefer a higher profit or do they go by my total income before tax?

Truthfully, I think my credit score it too bad to get approved this year but I don't want to put a lower profit in and shoot myself in the foot next year when I come to try again

Any advice greatly appreciated 😊

OP posts:
Dee1975 · 19/04/2021 21:50

It’s based in your taxable income. So the income you declare to HMRC and pay tax on is what they use.

BookishZen · 19/04/2021 22:06

As PP said it’s based on taxable income. Also check with who your getting your mortgage application with to see how much you need to show, there’s no need to show more on your return and pay tax on amounts you don’t need.

Just also be aware that some applications require the last three years returns to base the mortgage amount on.

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