Hi guys, thought I would drop by and ask some advise, on behalf of a relative. They're going to buy a house soon, and he's worried, because of his earnings. It turns out he's a private contractor, and he has some disguised earnings, paid via a loan scheme. Now they have applied for a mortgage, given a decision in principle, however, he's submitted a payslip with less wages, than he's actually paid, as the rest of the payments, are disguised as some kind of a loan payment, into the same bank account. The issue is that the mortgage broker has now asked for them to provide bank statements and they will be able to see that he gets more money, coming in than he told the mortgage company. Will this be an issue with the mortgage company?, that he gets more than he told them? Would they want to know the source of the other income?To be honest, from my end, I told him I'm more worried about him being locked up, by the tax man, instead. Your honest advise as usual required, especially regarding the mortgage.
Getting a mortgage, as a private contractor?
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Caporegime
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They will only take him on the money he has declared, via his tax returns.
Caporegime
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That'll teach him to dodge tax.
But how do people manage it in the first place? Do employers not check on this?
Oh OK thanks. So they won't bother about the rest?
Soldato
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That kind of loan tax 'idea' has been tried and caught before. Some people have to change jobs to get a mortgage, take it as a sign not to continue the arrangement.
Yes I agree, totally. Was quite surprised, actually that this is even possible, especially when someone works in a professional job.
Should I post my returns , I get stung over and over , by the taxman.
He's a contractor the people hiring him don't care about his financial arrangements, that's his hole to dig.
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Lol gutted. Hope he has learnt his lesson.
Soldato
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Made me laugh. Very commacal.
He's got the payslips to evidence what he said he was paid so I doubt it'll be a problem for the credit check/affordability.
He'll need to show where his deposit has come from though and if it's made up from these "loans" that may cause an issue.
He'll need to show where his deposit has come from though and if it's made up from these "loans" that may cause an issue.
Thanks for the positive response, my thoughts as well. In fact them loans, are probably the bulk of the deposit.
If they send in all that information, lenders now have an obligation (they never used to, may be not surprisingly...) to report any concerns of tax evasion, and can share all of that information with HMRC.
So by trying to prove how much they earn without paying tax on, they'll risk royall
I've never worked for any lender that would consider income in that way, and I've been doing it for 15 years.
So by trying to prove how much they earn without paying tax on, they'll risk royall
I've never worked for any lender that would consider income in that way, and I've been doing it for 15 years.
From my understanding of the OP, he's not asking the lender to consider income in that way. The amount he told the lender that he earns is the amount shown on his payslips. He's now worried that he has to show bank statements and the lender will question why there is more money coming into his account each month (in some form of "loan") than the salary he told them about.
They might do......
I dunno personally I wouldn't dig that much into because I can't be arsed these days going down rabbit holes I don't need to, but you get someone young and keen who still gives a **** they might.