Renting via Agency/Mortgage/Issues proving income/employment
Discussion
Two friends of mine are in their current notice period of their tenancy and had found somewhere else but it fell through after the LL found their own tenant. They now have only a few weeks to find somewhere to live, process an application and move.
The issue I am trying to help them with is that they recently both moved over to some kind of contractor payroll solution which is outside the UK (for tax purposes I believe) and this now leaves them with no proof of UK employment/income and also both are currently out of contract having been travelling for part of the summer (although they would normally go straight back onto contracts after a spell away, which is what they intend to do straight after moving house).
They had employment references for last tenancy but since moving to the offshore tax thing it seems they now have no way to prove income/employment references. How would they get around this with a Lettings Agent, all of whom I would suspect would require employment references/accounts? I understand there is a box on the property rental application forms called "independent means" - would they be able to use this and simply pay for a tenancy in one lump sum? From what I gather, this would be financially possible as they do both have fairly decent savings pots.
The bank also had issues with this contractor payroll thing when they tried recently to get a mortgage together, even though they had a substantial deposit. They are saying the bank said something about checking income with the taxman and that because they pay tax outside the UK, on paper their earnings are small, to reduce tax burden, but in reality they are substantial earnings, I believe 100k-150k, with ability to overpay a mortgage considerably. I don't know the ins and outs of the tax scheme, only that it was recently on the radar of the taxman and has since been superceded by a new scheme (but contractors are not being pursued for back tax as the scheme was compliant with something or other).
Any informal advice would be great to pass on, as I can't see how it can be possible for them to be earning at this level but struggling so much to get a mortgage or even just rent a property (and is it possible to rent and pay in one lump sum as I and others are suggesting and if so, are there any pitfalls in doing this?) Oh, I suppose it would also be useful to ask if anyone knows of any contractor plans or processes that could enable them to revert back to UK tax but without going PAYE or getting hammered? I think they used Limited companies or "umbrellas" at one time but some regulation or other caused some issues (sorry, I don't have full detail but could ask if it helps).
Many thanks for any advice.
The issue I am trying to help them with is that they recently both moved over to some kind of contractor payroll solution which is outside the UK (for tax purposes I believe) and this now leaves them with no proof of UK employment/income and also both are currently out of contract having been travelling for part of the summer (although they would normally go straight back onto contracts after a spell away, which is what they intend to do straight after moving house).
They had employment references for last tenancy but since moving to the offshore tax thing it seems they now have no way to prove income/employment references. How would they get around this with a Lettings Agent, all of whom I would suspect would require employment references/accounts? I understand there is a box on the property rental application forms called "independent means" - would they be able to use this and simply pay for a tenancy in one lump sum? From what I gather, this would be financially possible as they do both have fairly decent savings pots.
The bank also had issues with this contractor payroll thing when they tried recently to get a mortgage together, even though they had a substantial deposit. They are saying the bank said something about checking income with the taxman and that because they pay tax outside the UK, on paper their earnings are small, to reduce tax burden, but in reality they are substantial earnings, I believe 100k-150k, with ability to overpay a mortgage considerably. I don't know the ins and outs of the tax scheme, only that it was recently on the radar of the taxman and has since been superceded by a new scheme (but contractors are not being pursued for back tax as the scheme was compliant with something or other).
Any informal advice would be great to pass on, as I can't see how it can be possible for them to be earning at this level but struggling so much to get a mortgage or even just rent a property (and is it possible to rent and pay in one lump sum as I and others are suggesting and if so, are there any pitfalls in doing this?) Oh, I suppose it would also be useful to ask if anyone knows of any contractor plans or processes that could enable them to revert back to UK tax but without going PAYE or getting hammered? I think they used Limited companies or "umbrellas" at one time but some regulation or other caused some issues (sorry, I don't have full detail but could ask if it helps).
Many thanks for any advice.
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