With the end of the tax year around the corner, and mortgages for Self Employed applicants becoming tricker to source and get across the line, it’s absolutely key to make sure that you have the right documents ready for assessment both both your broker and your lender. We thought it would be useful to write a guide to getting the SA302 Tax Calculations and Tax Year Overviews from the HMRC Website as it is a little tricky to navigate!
What is an SA302?
Your Tax Calculation or SA302 is an overview of your income in differing categories for a given financial year ending 5th April.
It shows any salary or dividends, your land and property earnings, pension income and income from shares, savings and/or investments.
Basically, it shows your self-employed income in a simple one-page format per year.
What figures do lenders use?
Every lender calculates income differently, but the main important figure is Total Income Less Outgoings (or Net Profit before Tax). This is the figure that most lenders consider your income for the year. Many self employed applicants structure their expenses so that this figure is low (therefore not needing to pay too much tax), but a low Net Profit means Low Affordability when it comes to mortgage lending, so make sure you speak to your accountant if you are planning on applying for a mortgage or re-mortgage.
How do I get my SA302
If your accountant uses an electronic filing accounting package, they will be able to email you over a copy. These look slightly different to the HMRC ones, but will essentially show Earned Income, Net Profit Before Tax, and a breakdown of what tax and National Insurance is due.
Here is a step-by-step guide to downloading them directly from the HMRC Website
1. Head here www.gov.uk/log-in-register-hmrc-online-services
2. You’ll need to click on ‘Sign in’ or ‘Register for HMRC Online Services’.
3. Sign in using your Government Gateway login details.
4. Go to Self Assessment – if you are only registered for Self Assessment, you may automatically be redirected to this page.
5. Follow the link ‘tax return options’.
6. Choose the year from the drop-down menu and select the ‘Go’ button.
7. Select the ‘View return’ button.
8. Follow the link ‘view calculation’.
9. Follow the link ‘view/print/store your return onto your local drive’.
10. Follow the link ‘Save’ under A black and white HTML copy of your return.
11. Click ‘Save’
What does an SA302 Look like?
This is what the finished article looks like. Key things to note are that the Total Income Less Outgoings is the key figure to consider for your income.
Also take note of the income tax due figure, as this will line up with your Tax Year Overview on the next step !
What is a Tax Year Overview
A Tax Year Overview (TYO) simply shows the amount of tax due for any given year. The Tax Figure should match the figure on the corresponding SA302.
Sometimes the figure on the Tax Year Overview and SA302’s don’t match. We will check this when we look through your documents, but if they differ you will need to ring the HMRC to get correct copies.
How do I get my Tax Year Overviews?
1. Head to www.gov.uk/log-in-register-hmrc-online-services.
2. You’ll need to click on ‘Sign in’ or ‘Register for HMRC Online Services’.
3. Sign in using your Government Gateway login details.
4. Select ‘Self Assessment’ – if you are only registered for Self Assessment then you may be automatically redirected to this.
5. Follow the link ‘view account’.
6. Follow the link ‘tax years’.
7. Choose the year from the drop-down menu and select the ‘Go’ button.
8. Follow the link ‘Print your tax year overview’.
9. Select ‘Save as PDF’ and ‘Save’.
10. Repeat for any other years you require.
What does a Tax Year Overview look like?
This is what it looks like – Again, the key note is that the Tax figure matches the figure on the same year’s SA302.
How many do I need?
We will always ask for the last 3 years SA302’s and Tax Year Overviews as a standard. Many lenders only need to see 2 (or even 1 in some cases) , but if they are available we will always ask for 3 to see what options you have.
What can I borrow?
Every lender has different rules about what income they are happy to allow. Some will work purely off your Net Profit Before Tax figure, others may be able to work with retained profit in your business, employed income as additional income, or even work off your day rate as a self employed or CIS contractor. Contact Us to go through the details to get an accurate forecast of what a lender would be happy to lend.
