Heide's Blog - 12th April 2019 - Swift Mortgages & Finance

Heide’s Blog – 12th April 2019

6^th April 2019 was the start of a new tax year!

So what does that mean to you – or more importantly, what does it mean for your mortgage?

Well, if you’re self-employed, you may only just have submitted your tax return for the year ending April 2018.

But now another year end has come and gone you could submit your tax return for year ending April 2019 any time now.

Of course, you don’t need to submit your tax return until 31^st January 2020.

You could submit your 2019 tax return early….

But what would be the benefits of completing and submitting your tax return early?

You would get it out of the way and not have to worry about completing everything in one month after Christmas
You’d know in advance how much tax you need to pay and could start putting a little aside each month
If you’ve had a better year financially than 2018, the sooner you submit your 2019 tax return, the better your income will show in the event you need to apply for credit

And this is why you may want to consider submitting early if you are likely to need to apply for a mortgage between now and January 2020.

Mortgage Capacity for a Residential Mortgage is calculated using your Income

If you need to apply for a residential mortgage any time before January 2020 and you’re self-employed, you’ll normally need to show your SA302 and Tax Year Overviews as proof of your income.

If your 2019 year is likely to be better than 2018 then your mortgage capacity may be better if you submit your 2019 tax year before submitting your mortgage application. This is because your income may be higher than last year.

If you need to submit a mortgage application after the end of September 2019 you may limit your choice of lenders if you have not done your 2019 tax return. Although you do not HAVE to submit it before the end of 2020, the actual figures will be 18 months old* at the end of September 2019 and some lenders may not accept them as proof of your income.

*The 2018 tax return is showing the income earned during the financial year 6^th April 2017 and 5^th April 2018. By October 2019 that information will be 18 months old.

What exactly is an SA302 and Tax Year Overview?

The tax year runs from 6^th April to 5^th April the following year.

An SA302 is evidence of your earnings during that year.

The document is produced as a summary of the information you’ve submitted to HMRC for that particular year. It may include: