Sole trader unlimited company page

[ILOVEWATCHES]

Hello Guys and girls,

Recently come back from Australia, Been there for the last two years.

I now want to get a mortgage but been out of work for the last two years.

Im a qualified electrician but do not want to go down the route of self employed because i would need two years accounts to get a mortgage.

Is there anyway i can set up a company and pay myself PAYE?

Someone mentioned to me 'un limited' company so i don't have to file accounts. And i then can pay myself PAYE and then would only need 3 months pay slips?

Im looking at buying a house for 120k and got 24k saved up.

Any advice would be great, Thank you...

[dalenorth]

I would of thought your going to struggle, but I'm sure Sarnie will be along to advise soon.

[ILOVEWATCHES]

Also, Ive done a experien credit search and everything is good and proper....999 rating

[Eric Mc]

If you set up a company (limited or unlimited), you would still need to have two years worth of accounts - irrespective of whether you were paid a salary from the company or not.

I am not aware of an "unlimited" company business entity. If you run a business outside of the "limited" status - it will essentially be a sole trader operation - or possibly a partnership.

The various business "vehicles" are -

sole trader (unlimited)
partnership (unlimited)
Limited Liability Company (Ltd)
Limited liability partnership (LLC)

[ILOVEWATCHES]

So my only option then is to go work directly for a company for say 6 months on PAYE to get pay slips etc?

Am i still considered employed if i get work through an agency and paid through a UMBRELLA COMAPNY?

[Eric Mc]

Generally, yes.

[pacoryan]

You won't need 6 months on PAYE.

[ILOVEWATCHES]

Eric Mc said:

Generally, yes.

Was this yes to the umbrella company or 6 months PAYE?

Thanks

[Eric Mc]

ILOVEWATCHES said:

Eric Mc said:

Generally, yes.

Was this yes to the umbrella company or 6 months PAYE?

Thanks

Umbrella company question.

Be wary of umbrella companies though. Some operate complex and marginal tax avoidance schemes and techniques so you might might end up with evidence of income that would not be acceptable to a lender (loan notes, offshore trust documents etc).

The term "umbrella company" covers a multitude of different types of operations. Some are pretty straightforward - others are extremely complex.

[ILOVEWATCHES]

Thanks for that Eric.

To throw a spanner into the works, If i currently owned a couple of BTL and was getting a income from that would that be looked into when they did a credit search on me?

[Eric Mc]

Not my area of expertise, I'm afraid.

[Dave 500]

You will need to check but I think if you own 50% or more of a Ltd company you are classed as self employed.

[Eric Mc]

From a lender's perspective.

From a legal and tax perspective you are most definitely NOT self employed.

[pacoryan]

Often 20% from a lender's perspective.

[Dave 500]

Eric Mc said:

From a lender's perspective.

Yep I didn't make that clear.

[Eric Mc]

It's amazing how other bodies and organisations interpret things their own way - ignoring the legal niceties or up to date rules.

I had a conversation with a client yesterday who is looking to make a loss of earnings claim for time spent on court duties. The form he received from the court services asks him whether he had Schedule D or Schedule E income - and ignores the situation he is in, a director of a small limited company.

Those D and E income classifications were abolished by HMRC about ten years ago.

[Sarnie]

dalenorth said:

I would of thought your going to struggle, but I'm sure Sarnie will be along to advise soon.

Dale, many thanks for that!

As per our PM's yesterday, I will get back to you this morning.

For clarification, you can't set up any sort of a company and pay yourself PAYE and then use that as 'employed' income.

Lenders are more than wise to that. They will ask what % of the company the applicant owns;

- More than 20% = Self Employed for mortgage purposes

- Less than 20% = employed for mortgage purposes

Edited by Sarnie on Friday 17th January 16:46