Accountacy firm torrwaterfield share some advice on tax planning ahead of applying for a mortgage.
HMRC's form SA302 is a tax calculation produced when you have filed your Self-Assessment Tax Return online.
It is a calculation for a particular tax year showing your income, your tax allowances, the amount of tax you’ve already paid and what tax, if any, you still owe or which should be repaid to you.
If your Tax Return has to be amended and it affects the tax payable, HMRC will send you a revised SA302 showing the up to date position for that particular year.
If you are asked to provide evidence of your income, for example if you're applying for a mortgage, and you have been paying through self-assessment, you are likely to be asked for an SA302 for one or more tax years. Another document you may also be asked to produce is a tax year overview. This is a simple summary or statement of the tax due and tax you've paid during the tax year.
If you have filed your own tax return online, you can access your HMRC account and print off both the SA302 and tax year overview as required.
HMRC have been encouraging taxpayers to obtain a copy of the ‘Tax overview’ and ‘Full Calculation’ from the online service for some time and, from 4 September 2017, they have confirmed that they will no longer send paper SA302s to agents on behalf of their clients.
There are a number of lenders that will accept the tax overview and printed calculation in place of a paper SA302 and HMRC are working on educating other lenders to increase acceptance so that, once the SA302’s are no more, mortgage advisors will be happy with these documents instead.
If you don’t know where to start getting your tax year overview or tax calculation, most accountants, including torrwaterfield, use commercial software to produce tax returns for their clients. This automatically generates a tax calculation which is roughly equivalent to a form SA302. The majority of mortgage providers have agreed with HMRC to accept this Tax Calculation and the Tax Year Overview which your accountant can print off for you.
If you would like any assistance on this, then please contact the torrwaterfield on 0116 242 3400.