Sensible tax planning is absolutely key in order to make the most from your contracting career, however if you want to secure a mortgage, most tax efficient strategies can work against you.

We have blogged before about how many limited company directors choose to take a very low salary and then receive dividends from the company’s profits which are free from national insurance. However, some mortgage lenders only look at the low salary payments when calculating a client’s borrowing limit and this can seriously hinder one’s chances of securing that dream home!

At a4c we work with a team of independent financial advisors who are specialists in contractor mortgages.  They can arrange a mortgage on your behalf based on a multiple of your entire contract earnings and not just the Taxable Element. That’s right, NO Accounts, Payslips, P60’s, SA302’s or Tax Returns.

As a general rule of thumb, you can compute the typical borrowing potential as follows:

‘Current contract rate’ x 5 days x 48 weeks per year x 4.5 times.  Thus, at £300 per day for a five day week, you may be eligible for a £324,000 mortgage.  *Note, a contractor will need to provide a copy of their contract, detailing the terms of their assignment and bank statements confirming their contract earnings.

getting it right first time…

Many contractors have been let down by non-specialist advisors approaching the wrong lender or badly packaging the mortgage application. As each unsuccessful application leaves a footprint on the borrower’s credit report this can make things more difficult for future applications. Therefore it is essential to get it right from the start.

Call a4c today for more information – 01737 652 852