SA302s and Tax Year Overviews
An SA302 is HMRC’s tax calculation summary. Most lenders ask for two or three years, often alongside the matching Tax Year Overview to confirm the figures are final and paid.
- Shows declared income and tax due for each year
- Usually forms the backbone of self-employed affordability
- Can be downloaded from HMRC (or provided by your accountant)
Accountant’s reference
Some lenders also request an accountant’s reference — typically a signed and stamped letter confirming your accounts are up to date and your tax affairs are in order.
It isn’t always mandatory, but having it ready can prevent unnecessary delays once underwriting starts.
Business and personal bank statements
Lenders commonly request 3–6 months of statements (sometimes more), especially for business accounts.
Underwriters use these to sense-check that the business is trading consistently and that the income being used for affordability is realistic.
- Regular trading activity and stable cashflow helps
- Separate business and personal accounts are strongly recommended
- Heavy reliance on overdrafts or persistent bounced payments can cause issues
Limited company directors: why lender choice matters
This is where affordability can vary massively. Some lenders only use what you personally draw from the business, while others assess wider company figures.
- Some lenders use: salary + dividends
- Others may use: salary + your share of net company profit
Example: Salary and dividends only
If a director takes a modest salary and dividends — even where the company retains significant profit — some lenders will only assess affordability on what was withdrawn personally.
Example: Salary and net profit
Other lenders may include company profit (your share) alongside salary, which can dramatically increase the income figure used for affordability.
In practice, this can mean one lender assesses an applicant at £50,000 income, while another may assess the very same director at £130,000 — purely due to how income is calculated.
The accountant vs the mortgage view
Accountants quite rightly focus on tax efficiency, which can reduce taxable income.
Mortgage lenders focus on affordability evidence. Neither approach is wrong — but it does mean mortgage applications need to be structured carefully so the underwriter understands the full picture.
A simple way to reduce delays
- Have your latest SA302s and Tax Year Overviews ready
- Keep business and personal banking clean and separate
- Be clear on how income is taken (salary, dividends, retained profit)
- Speak to a broker early to avoid applying to unsuitable lenders