Mortgage - company accounts?
Discussion
Just wondered if anyone has come across the same or can kindly offer any advice?
I'm going through a remortgage application (my only house, LTV is about 50%, amount is about 2.5 times my and wife's combined salary) so fairly low end stuff.
The complication seems to be me having my income from a Limited and HSBC wanting signed audited accounts.
I've sent my self-assessment details and companies house submitted accounts (showing receipt stamp and my signature) but they are insisting on accountant signed accounts.
As I think is fairly standard I've had the same ICAEW accountant prepare and submit the accounts but they come with an accountant's report to the director along the lines of 'we have prepared the accounts based on what you've told us but cannot be held liable for them'. There is no requirement to audit the accounts.
I've also sent the full accountant's report to HSBC and copies of receipts of the invoices for the accounts being paid but apparently these are not enough.
I've asked my accountant if he has seen similar and awaiting a reply.
I really can't see how I'm unique in this so any experiences . advice gratefully received.
I'm going through a remortgage application (my only house, LTV is about 50%, amount is about 2.5 times my and wife's combined salary) so fairly low end stuff.
The complication seems to be me having my income from a Limited and HSBC wanting signed audited accounts.
I've sent my self-assessment details and companies house submitted accounts (showing receipt stamp and my signature) but they are insisting on accountant signed accounts.
As I think is fairly standard I've had the same ICAEW accountant prepare and submit the accounts but they come with an accountant's report to the director along the lines of 'we have prepared the accounts based on what you've told us but cannot be held liable for them'. There is no requirement to audit the accounts.
I've also sent the full accountant's report to HSBC and copies of receipts of the invoices for the accounts being paid but apparently these are not enough.
I've asked my accountant if he has seen similar and awaiting a reply.
I really can't see how I'm unique in this so any experiences . advice gratefully received.
Very few limited company accounts are formally audited and have not been since 1991.
Those that have been prepared by qualified accountants will have an "accountant's report" attached.
Banks should know this.
The accounts that are submitted to Companies House will be too light on detail for a lender as they will be stripped down versions of the full accounts (previously known as Abbreviated Accounts and now known as Abridged Accounts).
Those that have been prepared by qualified accountants will have an "accountant's report" attached.
Banks should know this.
The accounts that are submitted to Companies House will be too light on detail for a lender as they will be stripped down versions of the full accounts (previously known as Abbreviated Accounts and now known as Abridged Accounts).
Thanks All.
Hopefully its just a computer says no situation as I can only seem to get one line emails back to my queries on how to resolve it.
Interestingly they haven't asked for more detail yet just that what I have sent needs to be signed by the accountant. My accountant has previously submitted more detailed accounts than required so this may have confused HSBC re the requirement for audit.
Eric's advice highlights my confusion as its been standard practice not to audit accounts for some time yet here is HSBC asking for just that when I have already evidenced the accountants services via invoices and statements.
My self assessment isn't near the full company profits either and nor is the mortgage amount a stretch on our combined incomes.
I'll update when there is (hopefully) a resolution.
Hopefully its just a computer says no situation as I can only seem to get one line emails back to my queries on how to resolve it.
Interestingly they haven't asked for more detail yet just that what I have sent needs to be signed by the accountant. My accountant has previously submitted more detailed accounts than required so this may have confused HSBC re the requirement for audit.
Eric's advice highlights my confusion as its been standard practice not to audit accounts for some time yet here is HSBC asking for just that when I have already evidenced the accountants services via invoices and statements.
My self assessment isn't near the full company profits either and nor is the mortgage amount a stretch on our combined incomes.
I'll update when there is (hopefully) a resolution.
HSBC are a real pain the in ass with mortgages, especially when your income is derived from a LTD. Halifax, for example, were really great; I did use a specialist broker but I got a mortgage offer through in 10 days and got the repo I was after with 1 day to spare... or NBS that didn't even ask to see accounts (but took escalation to a senior underwriter as they first refused).
But to the point, I switched to HSBC and went through many hoops, I do recall them saying accounts should be audited but I took down all my unaudited accounts and had no problems. I went through all the hoops again last year with another mortgage (this time via phone) and whilst we had some real difficulties that made me regret the phone route - no mention of auditing this time, again spent hours with them going through my accounts and had no issues.
Is it the broker/advisor who's giving grief? Or has the application been sent back? Hopefully just an advisor that needs to speak to the right people internally. It's hard work borrowing when income is derived from a LTD co.
But to the point, I switched to HSBC and went through many hoops, I do recall them saying accounts should be audited but I took down all my unaudited accounts and had no problems. I went through all the hoops again last year with another mortgage (this time via phone) and whilst we had some real difficulties that made me regret the phone route - no mention of auditing this time, again spent hours with them going through my accounts and had no issues.
Is it the broker/advisor who's giving grief? Or has the application been sent back? Hopefully just an advisor that needs to speak to the right people internally. It's hard work borrowing when income is derived from a LTD co.
HSBC's stance on this;
"Limited companies
We will consider the applicant's share of net profit after corporation tax averaged over the last 2 years, along with their salary (often referred to as director's remuneration or emoluments). If the latest year is lower than the average, that figure will be used.
The last 2 years' signed audited or certified accounts, the most recent of which must be no more than 18 months old"
"Limited companies
We will consider the applicant's share of net profit after corporation tax averaged over the last 2 years, along with their salary (often referred to as director's remuneration or emoluments). If the latest year is lower than the average, that figure will be used.
The last 2 years' signed audited or certified accounts, the most recent of which must be no more than 18 months old"
It was the broker causing problems. It’s all gone quiet now but I’m expecting additional grief from HSBC at some point.
Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
trickywoo said:
It was the broker causing problems. It’s all gone quiet now but I’m expecting additional grief from HSBC at some point.
Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
If you have a set of accounts which features an unsigned Accountant's Report, get the accountant to sign it.Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
trickywoo said:
It was the broker causing problems. It’s all gone quiet now but I’m expecting additional grief from HSBC at some point.
Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
How was the Broker causing the problems if it was the lender rejecting your documents?Thanks again and I’ll update when things move on just in case anyone else finds the details useful.
The accountants report wasn’t actually signed but it had all their details on and I supported it with paid invoices detailing the accounts preparation, companies house submission, and Corp tax calculation and submission. In my mind that is better than a signature but think it’s a box ticking exercise the admin at the broker can’t think round.
As Eric says I doubt there will be any small companies in the uk who have their accounts audited in normal circumstances so the hsbc requirement is ridiculous.
Sarnie said:
How was the Broker causing the problems if it was the lender rejecting your documents?
I don't think the lender has actually rejected the documents, yet.The broker was just saying I needed to submit audited accounts and I was saying I can't and what else can I do instead.
I think my initial problems are to do with communication to and from the broker as they seemed to be insisting on audited accounts and I was asking how and why without getting anywhere.
Even in a phone call all I managed with the broker was a huff and 'they may not accept the unaudited accounts' when I tried to find a middle ground.
Many people outside the accounting profession do not understand that audited company accounts are actually accounts which have undergone a much more thorough review and checking process by the formal auditor compared to accounts which have been prepared by an accountant and which only show an "Accountant's Report". The auditor, by putting his/her name to the accounts, takes on the same legal responsibility for those accounts as the directors.
Well over 90% of limited companies do not undergo this process any more because of the extra costs incurred and because it is not a legal necessity.
Well over 90% of limited companies do not undergo this process any more because of the extra costs incurred and because it is not a legal necessity.
Update.
Just had the offer through and the maximum they have offered is more than twice what I needed so no idea why they caused such a fuss about my accounts.
Seems that a scrawl (was actually my accountants signature) is more acceptable than a detailed paid invoice showing the work done.
Seems to be zero scope for common sense but relieved its all done and standard unaudited small (micro) company accounts were fine in the end.
Just had the offer through and the maximum they have offered is more than twice what I needed so no idea why they caused such a fuss about my accounts.
Seems that a scrawl (was actually my accountants signature) is more acceptable than a detailed paid invoice showing the work done.
Seems to be zero scope for common sense but relieved its all done and standard unaudited small (micro) company accounts were fine in the end.
trickywoo said:
Seems that a scrawl (was actually my accountants signature) is more acceptable than a detailed paid invoice showing the work done.
It's about accountability. The lenders wants a professionals confirmation to be able to fall back should the worst happen.....an invoice gives them nothing.In the same way that a lender does not just take your word for it that your property is worth £x amount........they send a professional round to give them the same info........
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