Payroll via Ltd company plus salary for Mortgage

Payroll via Ltd company plus salary for Mortgage

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One of my payroll client (a single director with a Limited company registered in Jan 2015) got a full time job in March 2015 working 3 days a week earning £20K per year salary via payroll. She is also on £10K salary via her limited company for the other part-time jobs. The client is planning to apply for mortgage by December 2015 basing on income of £30K and a Mortgage broker has asked her to bring 6 months worth of payslips for the 2 jobs and personal bank statements in order to secure a mortgage. Now the client wanted to know if this will work as she is now paying more in tax as HMRC has asked her to be on BR  tax code for one job from now onwards. Has anyone done this before or is there any other way of declaring her £10K income as her first year end is January 2016? Thank you in advance. 

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By stratty
19th May 2015 14:19

Gross Income

My somewhat limited understanding on this is that they will be looking at the total gross income for PAYE purposes and therefore the tax paid is a bit of a red herring.

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Replying to tom123:
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By FRAS
19th May 2015 19:38

tax is actually paye

The client`s net salary from main job (3 day a week full-time position)  is now as follows as per April 2015 payslip;

Salary  £1663.20

 Less: paye  £313.20

NIC              £102.20

Pension ees £96.47

Net Salary    £1,166.49

The second job of £10K a year will be on  BR code from May 2015 onwards meaning to say her income tax (paye) will be more living her with less net salary.

 

 

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By DKB-Sheffield
19th May 2015 20:05

BR with both employers?

Hi,

I believe Stratty is right. The mortgage company/ bank will look at her gross income (before tax).

However, from the figures stated, your client is on BR both with her full time employer and her limited company which, if resolved should cancel out the problem.

Clearly, I assume there is no significant issue with her prior year income - aside from there being a potential issue with her final month's wages from the F/T employer,

You (or your client if you don't hold a 64-8 for her personal affairs) should contact HMRC to sort this out.

The only other thing I could think is that the main employer is now listed as her only or main job, hence she may receive the accumulative tax allowance in her payslip for May 2015 from the other employer?

All said, the mortgage company should consider the income to be £30K before tax in their assessment.

However... from a completely different viewpoint... don't be surprised if the mortgage company refuse to consider any income from the company - it's not unheard (particularly with new companies).

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Replying to pauld:
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By FRAS
19th May 2015 21:12

Thanks

I will let the client know. Thank you very much.

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