Mortgage “Relief”

No this is not another blog about the changes to tax relief for buy to let landlords, which were introduced in April 2017 (although if you want more information about that, see our article Changes to Tax Relief for Residential Landlords). Rather, this concerns the “relief” anyone who is self employed,  or receives dividends from their company and has applied for a mortgage in recent years, will feel, regarding HMRC’s decision to withdraw paper copies of SA302 for mortgage applications.

Mortgage lenders have always required confirmation of the income earned by many of us when we apply for a mortgage. This used to be in the form of a reference from your accountant, which was relatively quick and easy to obtain. However, for many years mortgage lenders have required the reference confirmation of income by way of a form SA302, obtainable by HMRC. Lenders have always refused to accept online printouts or printouts from the commercial software which almost all accountants use. The only option was to call HMRC and obtain a paper printout of the SA302 and forward this to the mortgage lender.

To be fair to HMRC (something which you don’t usually hear from me!) they have for some time dealt with requests for SA302s pretty rapidly, and certainly in a much more timely manner than they normally reply to requests for information from them. Nevertheless, there were still too many instances where the SA302s didn’t arrive when ordered. Consequently, mortgage applications were delayed with all the extra stress and strain that caused for anyone trying to buy a new home.

It’s now been confirmed that HMRC has been in discussion with UK Finance (formerly the Council of Mortgage Lenders) and their members. This was to understand lenders’ requirements and make the necessary changes so that they will accept self-served copies of the tax calculation from the HMRC online account or the commercial software used to file the self assessment return. Whilst most lenders have signed up to this, some smaller finance companies have not. A list of all the lenders who have agreed to simplify the process is available from HMRC’s website here.

As a result we should now be able to simply print a copy of the information mortgage lenders need when it is required rather than calling HMRC and then having to wait to receive a copy.

HMRC have confirmed that they will no longer be issuing paper SA302s from 4 September 2017.

Now there’s a “relief”!

For further information or advice on any of your financial needs, contact gary.inglis@raffingers.co.uk.

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