Getting on the property ladder if you are self-employed

If you are self-employed, one of the key benefits is being able to discount relevant business costs against income (that's expenses against income). This benefit, as I see it, justifies the inherent riskiness and lack of other perks that employment offers. The aim, if you like, is to make as LITTLE 'taxable' profit as possible by keeping receipts and noting down proper business costs. However, in doing this, all banks and institutions offering mortgages look only at the figure AFTER expenses have been taken off (i.e. NET). This means that if you earn a relatively healthy £30k-£40k and put off a realistic £15k-£20k expenses, this would show up in the accounts as only £10k for the year end. Compare and contrast where figures for employed are taken as they are. So, for example: somebody employed on £25k is likely to be accepted for a mortgage, whereas somebody self-employed on, say, £40k isn't (if they've put down expenses as any accountant or HMRC official will support).
I'd like to propose that we make it easier on the self-employed to get onto the 'property ladder' by looking at the gross income/turnover AS WELL (not necessarily instead) as net. Otherwise we aren't encouraging business owners and risk-takers (at least those who aren't generating much higher profits...yet).
Jack Symons, Treetops BD | Tue 17th Dec 2013 at 15:42

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