If you’re self-employed and looking to remortgage or buy a property soon, it’s worth submitting your 2024/25 tax return early so that it doesn’t delay your mortgage application.
Although self-assessment tax returns for the tax year ending April 2025 aren’t due to HMRC until 31st January 2026, most lenders require that your latest tax return is no more than 18 months old at the time you submit your mortgage application.
That means if you’re applying for a mortgage after 5th October, figures for 2023/24 can no longer be accepted as the latest year’s numbers and you’ll need to provide paperwork for the 2024/25 tax year instead.
David Hollingworth, associate director at L&C Mortgages said: “It could come as a nasty surprise for any self-employed borrowers that aren’t aware of this requirement. As the 18-month timeline ticks over, those applying for a new mortgage could find that they need to submit their tax return in a hurry to meet lenders’ requirements.
“That could cause a delay that would be particularly unwelcome for those looking to move home but could also affect those remortgaging to a better deal. It’s worth looking ahead if your deal is ending soon and filing your return so it’sup to date could make for a smoother mortgage journey.”
What paperwork do you need?
You’ll usually be asked to provide proof of your self-employed earnings for the last two to three years when you submit a mortgage or remortgage application, although some lenders are prepared to accept one year’s records. If you’ve only recently become self-employed, it’s worth seeking advice on which lenders take a more flexible approach.
Lenders typically want proof of earnings in the form of accounts, prepared by a certified or chartered accountant, but if you don’t have accounts available, your lender may be prepared to accept your self-assessment tax calculations (SA302 forms) which you can access by logging into your HMRC online account.
You’ll also need to provide bank statements and details of any regular income or contracts.
Do self-employed people pay higher mortgage rates?
No, if you’re self-employed you can apply for exactly the same mortgage rates as everyone else, but you’ll need to demonstrate to lenders that you have a regular income and will be able to keep up with repayments.
This can be challenging if your income tends to fluctuate significantly from month to month or, as mentioned above, if you’ve only recently become self-employed. If you’re worried you don’t have the information required to secure a mortgage, get in touch with a broker who can advise whether you’re likely to be eligible and which lenders are best to approach.
You can explore self-employed mortgage deals and learn more about how self-employed mortgages work here.
