Starting a new business? Get 40% off our accountancy services for 3 months! 😀


Obtaining a mortgage when self employed used to be much easier as you could self certify your income without providing any evidence. Loans were frequently approved without evidence of income, resulting in a number of people struggling to afford their mortgage payments as they borrowed more than they could comfortably afford, usually inflating their income.

Anyone who has an irregular income, either from multiple employment sources or being self employed will be required to produce a complete set of accounts, usually for two or three years, and completed self assessment tax returns. Employed individuals find it easy to prove the level of income they receive, with a form P60 which is provided by their employer at the end of each tax year, showing pay and tax details for the year. Although self employed people often earn more than someone who is employed, it can still be difficult to obtain a mortgage.

It is the practice to minimise tax deductions by legitimately claiming all expenses and deductions that are incurred in the course of carrying out business duties. The expenses and deductions are subtracted from the gross profits, leaving the net profit. It is the net profit which a mortgage lender will use to calculate the amount you can borrow. Prior to applying for a mortgage, it may be advisable to reduce the expenses and deductions so that you maximise profits, allowing you to borrow a higher amount.

People who have only just become self employed will struggle to prove their income, as they may not have accounts or a self assessment tax return to provide, and many lenders require accounts for up to three years. A self assessment tax calculation can be obtained from HM Revenue & Customs, which is a form SA302. The form will display the information required which covers a specified period, typically two years. If business accounts are requested, the latest accounts must be provided and be no more than 18 months prior to the mortgage application.

It is also possible to obtain an accounts certificate from your accountant if necessary. If you are a shareholder of a limited company, you will possibly receive a combination of a salary and dividends, which is efficient tax planning. Combining the total of the two received will give you your net profit. Prior to applying for a mortgage, it may be prudent to draw a larger salary or dividends rather than leave profit in the company as investment, as this will increase your net profit available to calculate the size of loan.

Inline Feedbacks
View all comments

Read more posts...

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More

The Accountancy Partnership – Our Positive Reviews

Here at The Accountancy Partnership, we’re proud of our customer reviews The reviews we receive from our customers show how hard we…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.


You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?


Call us on 020 3355 4047 if you’re not sure.