Self-Employed & Contractors

How self-employed income is assessed

Some lenders require 2–3 years of accounts, but an increasing number accept just one year of self-employment, or assess contractors on their day rate rather than taxable profit. The right lender depends on how you're structured and how long you've been trading.

Sole traders are usually assessed on net profit, while limited company directors may be assessed on salary plus dividends, or salary plus net profit. We know which lenders use which method, so we can present your income in the most favourable light.

Contractor mortgages — borrowing on day rate

If you contract through a limited company or umbrella arrangement, some specialist lenders calculate your borrowing using your day rate rather than your accounts. A common method is day rate × 5 days × 48 weeks, which can significantly increase the amount you can borrow.

This approach suits IT contractors, locum medical professionals, and freelancers with a strong contract history. We'll match you to lenders who understand contractor pay and won't penalise you for retaining profit in your company.

• Day-rate income assessment (some lenders may annualise qualifying contractor income, subject to criteria)
• Umbrella company and PSC contractors considered
• IR35 status explained in the context of mortgage applications

CIS workers — treated as employed

If you work under the Construction Industry Scheme (CIS), you're classed as self-employed by HMRC — but that doesn't mean you're stuck with self-employed mortgage assessments. We work with lenders who treat CIS workers as employed, using your gross CIS income (often your day or week rate × working weeks) rather than the net profit on your Self Assessment.

This can significantly increase the amount you can borrow, because employed-style affordability typically allows a higher income multiple than a profit-based self-employed calculation. You'll usually need your CIS payslips, a recent SA302, and proof of continuity of work, but some lenders accept less than the two years' accounts traditionally required.

• Gross CIS income used — not net profit
• Employed-style affordability (higher income multiples)
• CIS payslips + SA302 accepted as proof of income
• Less than two years' CIS history may be acceptable

Complex and multiple income sources

Self-employed income is rarely simple. You may have a mix of salary, dividends, rental income, a second business, freelance work, or a partner who is also self-employed. Many high-street lenders struggle with multiple income streams — but specialist lenders are used to them.

We know which lenders will combine several income sources for affordability, which accept a director's salary plus retained profit, and which can consider a second job or side income that hasn't been trading long. We'll present the full picture of your earnings to the right lender, rather than letting a rigid affordability calculator cut your borrowing short.

• Salary plus dividends, or salary plus retained profit
• Rental, freelance, and side-hustle income combined
• Joint applications with two self-employed applicants
• Seasonal or fluctuating income averaged over recent years

Preparing your self-employed application

Having the right documents ready speeds up your application. Most lenders will want to see your latest two years' SA302s and Tax Year Overviews from HMRC, plus recent bank statements. Some may accept an accountant's reference or contract evidence instead.

If your profits dipped during a particular year — for example during the pandemic — we can explain the context to lenders and use lenders who average income or focus on the most recent trading period.