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Proving your income when you’re self-employed

From time to time, everybody is faced with a situation where they will have to prove their income. Whether it’s to start renting a property or applying for a mortgage, proving you earn what you say you earn is effectively inevitable.

Proving what you earn as an employee shouldn’t cause you many problems: you can just present your payslips and carry on. Proof of income for self-employed people may not be so easy to come by. It is important to be accurate, particularly when it comes to large loans like mortgages. Lenders need to be sure that you’ll be able to keep up with necessary repayments, but exactly how do you prove your income?

In this article we’ll be looking at the different ways in which self-employed people can prove their income based on the situation they find themselves in.

Going solo

In this section, we take a look at proof of income for self-employed sole traders. If you have gone solo into the business world, your income is simply whatever profit the business earns – simple. In fact, if you are a sole trader you’ll have it quite easy when it comes to proving your income when you apply for a mortgage. If you are applying for a mortgage, your lender will likely ask you for an HMRC SA302 document, if you are not sure what that is, we expand on this below. On some occasions you may also be asked to provide a Tax Year overview.


The HMRC SA302 is the tax calculation of your declared income from the previous tax year. This form is processed by the government and shows your income and calculated tax which makes it a very reliable piece of evidence for a lender. In fact, most lenders will accept nothing less than an SA302 document as proof of income for self-employed sole traders.

To prove that your income is consistent, you will probably have to provide an SA302 that covers the past 2-3 tax years. Of course, it may be the case that you have not had your business for that long. This can make it a little harder to be accepted and lead to you having more hoops to jump through than usual. Of course, it is unlikely that you will not be accepted at all, so talk to an independent mortgage advisor to discover the lenders who may be more suited to your situation.

When it comes to actually getting your SA302 documents, you should not have a problem. If you have an accountant, you should be able to ask them to just generate a copy of the SA302. If you do not employ the services of an accountant, you can download it yourself. Simply go online to the SA302 tax calculation website, sign in and follow the instructions.

Tax Year overview

Sometimes lenders will also require a Tax Year overview in conjunction with the SA302. This document can be cross-referenced with the SA302 and gives your proof of income an extra boost – making the loan application process easier. You can access this document from the same place as your SA302, so while it may be an extra document that you need to supply, it will not make the application process any more difficult than it usually is.

Business partnerships

This will only be a short section, because if you are in a partnership, you will be in a similar situation to a sole trader when it comes to proving your income. Any profits that your business makes is considered to be the income of anyone involved in the partnership, so you will just need the same documents as a sole trader.

Limited company directors

As a company director, you may find that things start to get a little more complicated when it comes to proving your income. Much like a sole trader, a lender may still want to see an SA302 to prove your salary as a company director. However, many directors of limited companies choose to take a smaller salary, making up the majority of their income through dividends.

How dividends affect proof of income

Despite so many directors taking most of their income in the form of dividends extracted from their business’ profits, many lenders will still only accept your actual salary as proof of income. As this is the case, it is worth contacting an independent mortgage advisor to find a lender willing to take both salary and dividends into account when assessing your income.

Limited company accounts

As a company director, there is a likelihood that you will be asked to show your lender the limited company accounts from the past few years to further confirm your earnings. These will be the accounts that your accountant has already submitted to Companies House, so it should not be a problem for the accountant to acquire them. Just be sure that you are submitting the detailed version of your accounts, not any abbreviated versions.

Depending on the lender’s requests, you may also have to provide an accountant’s signature to confirm your earnings. If this is the case, make sure that your accountant is certified or chartered, otherwise their word does not hold much weight.


Are you a business owner looking to get a mortgage? Contact IMC’s mortgage advisory team today and we can help you climb the property ladder.


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