LTD Company Contractors

As a Ltd Company Contractor you may have taken the decision to set up your own limited company or be planning to do so, in order to manage your personal income. 

This model provides a range of tax efficiencies which make it the preferred choice for many; as it means that a qualified accountant can take care of your income and tax, so that you don’t need to spend the time completing frustratingly complex tax returns.  

However, for most contractors the frustration can arise when attempting to secure funding. UK mortgage lenders maintain a consistent process when checking income for self-employed individuals. And for an applicant using a LTD company to manage income, the vast majority will only accept the salary and dividend drawings from the latest two to three years of trading history, for the purpose of securing mortgage funding. 

For many contractors this can come as a surprise, as generally speaking, the company is being used to handle the regular income received from yourself as the sole employee and director of the company. As such, the turnover of the business reflects the income you personally secure on a yearly basis and any funds left in the business are yours to take at any given time. 

Even more frustrating is that a contractor just embarking on their new career path will have at worst no accounts and at most, under the minimum two years that UK lenders require for a mortgage application.