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SA302 form, mortgage applications

SA302 form, mortgage applications

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Hi, I have quite a few limited companies, where there is only one director being paid a basic salary and dividends as the only shareholder. They all seem to be in the midst of applying for mortgages at the moment and they all come to me asking for their SA302 form. Previously other clients have sufficed with a copy of their full personal tax return, signed company accounts and an accountants reference if requested.

From my experience Iris software used to produce an SA302 form as part of its self-assessment form and summary. I am now using Digita which still produces the same tax calculation summaries but it isn't labelled as an SA302 form.

HMRC say that if you personally submit your tax return online through HMRC then you can print an SA302 form and if you used an Accountant then you can ask them for one.

So my questions are-

- Is the Digita report that looks like an SA302 acceptable as an SA302?

- If not, other than contacting HMRC to request an SA302, how do I produce one if I used software to file the return?

- Surely a copy of the submitted full tax return, tax calculation, summaries and schedules is sufficient to provide the same information and that an actual SA302 is not required?

Any advice would be much appreciated, thank you.

Replies (13)

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By Anne Robinson
13th May 2015 15:21

An earlier thread stated that HRMC is no longer supplying SA302s but we have requested 2 this week and although we haven't actually received them they took the details and said they would be sent to taxpayer (as usual)
Sage Tax now has the words SA302 on the calculation (not often Sage is ahead of the game!)

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By KennethMennie
13th May 2015 15:34

Digita have said that the Council of Mortgage Lenders have confirmed that their system generated calculation will suffice so long as the name and UTR are clearly shown.

"We have recently become aware of issues and confusion relating to HMRC's and mortgage lender's relaxation of the rules for the tax calculation form SA302. We would like to take this opportunity to clarify the position in relation to Digita Personal, Business and Trust Tax.

HMRC do not permit us, or any other 3rd party providers to produce an 'actual' SA302 Tax Calculation.

The Council of Mortgage Lenders have confirmed that the system generated tax calculation within Digita Personal, Business and Trust Tax is sufficient so long as the taxpayer's name and UTR are clearly displayed (You can access this calculation via Reports | Computation | Computation Report | Summary) .

Dependent upon the mortgage provider, they may also require a copy of the tax year overview from HMRC's online portal as well as the system generated tax calculation from within Digita Personal Tax"

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By johnjenkins
13th May 2015 15:36

I use tax assistant

which has SA302 on it, but still lenders want the one from HMRC.

What lenders are asking for is third party (HMRC) confirmation of income.

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Replying to ireallyshouldknowthisbut:
By Ashlea
13th May 2015 15:52

So an Accountant isn't reputable or trustworthy to rely on!? :)

johnjenkins wrote:

which has SA302 on it, but still lenders want the one from HMRC.

What lenders are asking for is third party (HMRC) confirmation of income.

I can see both sides of the coin for wanting a third party confirmation, but surely if an Accountant has produced the tax return then the Accountant is a third party in their own right and is bound by professional ethics and moral codes to ensure the information is correct. If mortgage advisers/lenders are wanting an actual SA302 for the third party reason then something has gone wrong with the moral value and trust of an Accountant. Incidentally banks are the ones in a lot of trouble according the news though! Its laughable isn't it!? :)

Also as a second thought about having a third party verification on mortgage applications, if the person has dividends from their own limited company whose accounts are not audited by a third party, then surely that information could be fabricated slightly along with the accounts that we signed by the same Accountant who produced the personal tax return!? Madness and more madness.

Just to add, I say all of this in jest to point out how unnecessary an actual SA302 is, especially if you have to wait 2-4 weeks to receive it from HMRC after finalising and submitting the tax return.

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By josephc
13th May 2015 15:40

In my experience..

..HMRC will usually provide these within 2 weeks when requested over the phone for them to be sent by post. (They used to fax them within 24 hours, but now the UTR is blacked out for 'security reasons' when sent this way). Mortgage providers vary on their acceptance, I've had some accept standard computations whereas some who will only accept SA302's with the HMRC covering letter.

Our usual procedure is to request an SA302 to be faxed to us which will come within 24 hours if the SA302 is urgent and also request that this comes by post incase the mortgage provider reject the copy with the blacked out UTR.

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By johnjenkins
13th May 2015 16:12

@Ashlea

You also have the added bonus of the SA302 showing taxable income (after CA's).

I must admit that we have a few lenders, now, that accept our Accountants Reference but you are quite, right lenders do not trust us. No more than we trust them. Some still ask for audited accounts for the self-employed.

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By jon_griffey
13th May 2015 16:37

Get the HMRC SA302

HMRC are generally agreeable to faxing SA302's in all cases although half the time they never arrive and have to be requested again.

I would not bother with software generated SA302's.  The lender will come back a few weeks later when the client is about to exchange and ask for HMRC issued ones.

Also clients will often make several mortgage applications to different lenders and so it is very handy to have the HMRC SA302's to hand to use again.

 

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By johnjenkins
13th May 2015 17:28

@jon

You need to be careful with clients applying to more than one lender. There's a thing called Hunter's report so lenders know when you're doing this and it can affect the underwriters decision.

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By bronnley
13th May 2015 17:53

I've not had any problems recently

I have phoned the Agent's dedicated line twice in the last 3 weeks requesting SA302s to be faxed.  On the first occasion, no questions were asked, other than for the fax number, and I received the fax within 2 hours......no blacked out UTR, in fact it was circled.  On the 2nd occasion, I was asked if it was urgent, to which I replied 'YES' & was told I should receive it by fax within 24 hours, I actually received it in under an hour! Again, no blacked out UTR.  First class service!

However, problems then arose because in one of the cases, the client had net rental income per accounts of £20K but SA302 showed NIL taxable income  because client had property losses brought forward.  Trying to explain accounting profit and taxable profit to a mortgage lender is not an easy task!

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By williams lester accountants
13th May 2015 19:02

Bankers
As long as banks fail to understand the difference between accounting profit and taxable profit, or even the difference between a sole trader and a limited company, then we will struggle to get a sensible result for our clients. Like every industry banks have deskilled their staff and the consequences are obvious in the 'computer says no' mentality.

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By K81
14th May 2015 09:19

address

...I have been told by a lender that they require the SA302's from HMRC with a covering letter to check the current address of the person applying for the mortgage.

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Jennifer Adams
By Jennifer Adams
14th May 2015 10:46

Slightly off the point.

Recently I had a client who was applying for a buy to let mortgage with a provider who should be nameless but Sir Richard Branson comes to mind.

They asked for SA302 - sent by fax by HMRC within hours of asking - no blanked out UTR.

Tax return and SA302 clearly shows self employed profit about £40k (note: not a company as he cant become one - his profession wont permit).

Rent will be in excess of 2 x mortgage payments.

However... he receives a large amount in dividends from a French family trust (about £50K).

His application was initially refused.

He asked me to get on to them. Reason given was that they automatically refuse anyone who has dividends as they might be getting the monies from a company of which he is a director (ie low or nil salary -income taken as divs)

After I pointed out the error of their ways he got his mortgage.

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By sbt
21st May 2015 12:39

Wont fax as not a normal area code

We have mixed results when trying to get SA302 faxed, sometime will sometime wont.

As with most people fax is out of date and we dont actually have a fax machine so use an electronic email fax system. We have now had HMRC refuse to use the number as it isnt secure enough as it isn't a real area code.

With regard to sending a system generated SA302 and the tax overview I don't think we have had any accepted so given up on this. The last one was Halifax, they are a member of the council of mortgage lenders but would only accept the original SA302 from HMRC.

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