Partners income status is awkward

[DietCokeIsBae]

So myself and my partner (and our gorgeous 5 month old) are needing to move out of our small pokey one bed council flat and have found a lovely family home in an area not too far from us.

I am a stay at home mum and plan to be indefinitely now as we would like more children. My partner works from home as a digital marketing director. He IS NOT self employed, but classed as employed by his own company where he is director. He earns his wage through clients that he charges by the hour - they each have contracts though and he submits invoices every week to them.

We put down an application on the lovely house and they struggled with me being unemployed but wanting my name on the tenancy, eventually they agreed that putting 'my half' of the rent down up front would allow me to pass reference checks. So we have the option to do that should we need to.

Our applications were submitted for referencing and we were in constant contact with homelet regarding this as there were multiple issues - they had us both down at the wrong address (not even old addresses, they'd literally put us down as living either side our actual home - myself at 17 and my partner at 19 when we actually live at 18) Then they had issues with my partners income and kept referring to him as self employed when he isn't. He provided them with all the invoices and copies of his bank statements, everything he can think of to prove his income.

Now we've heard back that it's not good enough, the tone of one of the letting agents he spoke to alluded to them accusing him of lying about his income and they say he needs 3x the rent in his accounts as a currently available balance or a guarantor earning 3x the rent.

My partner is earning 3.7x the rent! I don't understand the problem? I understand he doesn't fit into their checkbox but surely there's a way to do this because otherwise how will we rent anywhere that isn't council??

Please help someone, I'm so upset at the thought that we might be missing out over a technicality!!

I assume his income is variable and this is the reason? How far back can he prove his income averages ? How long has he worked for them?

A lot of people misunderstand the difference between being a director of a Ltd co and self employed. Doesn't help with this time, but next time I'd just get him to say he's employed as a digital marketer at x company and provide payslips. Truthful, far simpler and no room for misunderstanding.

This time maybe try providing payslips and setting your accountant on them? Or providing a copy of his tax return? Surely they wouldn't think he'd overstate his income on that?

As far back to Jan last year (re average income). Since he only founded his company recently - his company's first year tax return/accounts was due this year. The fiscal year of the company runs from April to April.

They disregarded 12k worth of income on the basis that it came from PayPal..the end company (USA based) had no other means of paying him.

He has proof of payments/income from hmrcs payroll software - he hasn't shown them this yet, but maybe this would help?

It is the fact that he only has one set of accounts and have been signed off by an accountant? Most things require two full years of accounts signed by an accountant. It has improved it used to be three years.
Because he it is his own company and I suspect he draws dividends as opposed to salary for most of his income they need to see a period of consistency.

Can his company employ you as well? Then you'll have two sets of payslips.

Be nice to Homelets and referencing people. They want you to pass, otherwise they have to find another tenant but many landlords get insurance so you need to pass certain hurdles to get accepted. You are both on the sane side. Get him
To take an hour or so off work and go and see them and be nice. It sounds as if there is a junior inexperienced person doing this. But you really need a full history usually of 2 years and evidence there are contracts going forward for at least a year.

He needs to speak to his accountant - as in, his company's accountant. Isn't he taking his profits mainly as dividends with a fairly small salary? This is what most people do. The fact that the US company paid his company via Paypal should be irrelevant to a personal application for a mortgage - was he trying to demonstrate the income of the company? I believe this is usually done by submitting evidence of invoices and contracts - this is what a friend of mine did when getting out a specialist mortgage designed for self-employed/company directors (it's the same difference I think as far as a bank is concerned, basically you don't have a guaranteed income stream).

My advice would be to:

• look for a mortgage designed for people in this situation, not one intended for salaried people not working for their own income
• do not put you on the payroll unless you can demonstrate actual work being done, this is a definite no-no for HMRC. You could be drawing dividends from his company, and probably should - I personally think this is the fairest way of recognising the work of the SAHP.

Oops sorry have just re-read and it's not a mortgage you're after. Can he offer to pay x months up front? That's what my self-employed tenants did a few years ago.

If employed show payslips. If he has a large amount of saving u would show them those statements too.

Ah ok, so he set up his own company for tax purposes and puts all his income through this then takes his money out. For all intents and purposes he is actually self employed.

When you say he can prove to last JAN, so twelve months, uou then say he set up his company recently, so how recently?

I suspect the issue here is unstable/uncertain income and lack of longevity. I would meet with the agents to explain. Can you afford to pay in advance? When I had tenants who had issues that caused the agent concern, they would pay six months in advance and the agent would hold it and pay us monthly.