Mortgages and loans – will your client’s lender accept your SA 302?
Find out which mortgage providers and lenders accept printed tax summaries.
When a client applies for a mortgage the lender will normally ask their accountant for various earnings details which include the self assessment (SA) 302 summary. This summary gives details of the figures for a selected tax year.
Most accountants use commercial tax software to file tax returns online. The SA 302 is generated by this software and therefore not by HMRC’s system. The issue in recent years is that many lenders have not accepted the accountant's generated SA 302 and have insisted that the taxpayer obtains one from HMRC directly.
In some cases this caused friction between the accountant and their client as the client unfortunately was left with the incorrect impression that the accountant is the problem and not the lender. It also means the taxpayer may have to contact HMRC or set up a personal tax account themselves which causes delays to their application.
To solve this problem HMRC has said it listened to the criticism and improved its self assessment online documentation so that ‘lenders may consider them as evidence of income declared to HMRC and to meet the Financial Conduct Authority challenge over the robustness of the tax calculation’. This has involved discussions with the Council of Mortgage Lenders.
There is now an official list of lenders that will accept either:
a copy of the client's tax calculation (SA302) printed from the HMRC online account
a tax calculation printed from commercial software used to submit returns.
The lenders on this list have agreed to accept tax calculations and tax year overviews that clients, or their agents or accountants, have printed themselves. The list is updated regularly but there may still be issues if the client is using an agent to find mortgages or if they are arranging a mortgage with a lender that has not signed up to HMRC’s list.
As with anything , timing is the main issue so if a client is attempting to obtain a mortgage or re-mortgage they should be encouraged to contact their accountants as soon as possible and not leave a request for financial details until the last minute.