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Complex income

Your income is real. It just needs reading properly.

Self-employed, a company director, a contractor, two jobs, paid in euros or half your pay in bonus? Lenders treat each of these very differently. Knowing which one reads your income best is most of the battle.

The short version
  • Lenders differ a lot on what counts as income, and on how much history they want to see.
  • Some lenders will consider one year’s accounts; many prefer two or more.
  • For company directors, some lenders look at salary plus dividends; others can consider your share of the company’s profit.
  • Getting the paperwork in order before you apply makes a real difference.

Self-employed and sole traders

Most lenders work from your SA302 tax calculations and tax year overviews from HMRC, or from accounts prepared by an accountant. Many want two years; some will look at one. Lenders also differ on whether they average your years or use the latest, which matters if your profit has gone up (or down).

Limited company directors

The classic problem: you pay yourself a small salary and dividends for tax reasons, and leave profit in the company. A lender that only counts salary and dividends may see a much smaller income than you really earn. Some lenders can look at your share of the company’s net profit instead.

Contractors

If you work on a day rate, some lenders can work out an annual income from your contract rather than your tax returns, often with a minimum time contracting or a minimum time left on the contract. Umbrella company and IR35 arrangements are treated differently again.

More than one income, bonuses and foreign currency

  • Two or more jobs: some lenders count a second job in full, some in part, some not at all.
  • Bonus, commission and overtime: often averaged over one or two years, and sometimes only a percentage is used.
  • Foreign income: fewer lenders accept it, and those that do may reduce it to allow for exchange-rate swings.

What to have ready

Depending on how you’re paid: your last two years’ SA302s and tax year overviews, company accounts, recent payslips and P60s, your current contract, and three to six months of bank statements. Don’t worry if you don’t have everything yet. Andy will tell you what your case actually needs.

All lending is subject to status and lender criteria, and there is no guarantee of approval. Your home may be repossessed if you do not keep up repayments on your mortgage.
Who this is for

Incomes Andy looks at every week

Sole traders
Recently started, growing fast, or one tricky year in the accounts.
Company directors
Low salary, dividends, profit retained in the business.
Contractors
Day-rate, fixed-term or umbrella. In or outside IR35.
Several incomes
Two jobs, a portfolio career, or rental income on top.
Bonus & commission
When a large slice of your pay changes year to year.
Foreign income
Paid in another currency, or working abroad.

Common questions about complex income

I’ve only been self-employed a year. Is that too soon?
Not always. Some lenders will consider one year’s accounts or tax calculations, especially if you were in the same line of work before. The choice of lender is narrower, so it’s worth talking it through first.
My accountant keeps my profit low to save tax. Does that hurt?
It can, because lenders lend on the income you show. That’s exactly where lender choice matters, and why it helps to plan the timing of an application with your accountant.
Do I need an accountant?
Not necessarily. Many lenders accept HMRC’s SA302s and tax year overviews. Some prefer accounts signed off by a qualified accountant, particularly for company directors.
Is your income easy to explain, but hard to fit in a box?
Tell Andy how you’re paid. He’ll tell you which lenders read it best, and what they’ll want to see.
Talk to Andy → Call 01489 250343
First consultation free · no credit search · whole of the UK