Mortgage Applications and Proof of Income, the HMRC SA302 Form

Mr and Mrs P, from Shedfield near Southampton in Hampshire wanted to build their own home. Not surprisingly, when they applied for a mortgage, their financial adviser asked them for proof of their earnings. Fair enough.

The proof that the FA asked for was very specific, namely a HMRC Form SA302, neither an accountant’s reference nor signed sets of accounts would do.

SA302’s are not provided automatically by the tax system in most cases, and obtaining one causes delay and work. It is actually quite lazy on the part of the mortgage industry to rely on the SA302 as proof of income.

The same commonly applies to lettings as well, with the Landlord or agents insisting on an SA302 Form from a future tenant if payslips are not available, eg for self employed people.

At Nicholas Ridge, CTA it was explained to Mr and Mrs P, from Shedfield near Southampton in Hampshire that the system is badly-designed, and that they needed to contact the tax office themselves for the Forms, giving the web-site link
https://www.gov.uk/sa302-tax-calculation
It was also explained however that sometimes mortgage providers will accept the tax calculations provided by your accountant’s own accounting and tax software, and a copy of theirs was sent to them at the same time, for them to check with the FA.

Mr and Mrs P had major problems trying to access the SA302’s. They had to re-register and then wait 7-10 days for an activation code to arrive via post. They were left not knowing why it was so difficult to access information from HMRC.

The FA had said he definitely needed the SA302 as Mr and Mrs P, from Shedfield near Southampton in Hampshire could not process the application without it so it looked like they were just going to have to wait.

At Nicholas Ridge CTA, Mr and Mrs P were told not to be too hard on HMRC: more, the mortgage industry stuck in the past and incapable of adapting.

That was in November 2016.

HMRC has now agreed a list of mortgage providers and lenders who accept a SA302 tax calculation or tax year overview as a print out from HMRC web-site, or from an accountant’s proprietary software.

Here is the link

https://www.gov.uk/government/publications/mortgage-providers-and-lenders-who-accept-a-sa302-tax-calculation-or-tax-year-overview

Beware, not all of those on the list seemingly know about it, and continue to press needlessly for the formal SA302.

Mr and Mrs P, from Shedfield near Southampton in Hampshire meanwhile really appreciated the efforts that Nicholas Ridge CTA made on their behalf.