Anyone who has tried to get a mortgage while being self-employed probably won't look back fondly on the memory. Way more paperwork, from tax returns to bank statements dating back several years, can be required. And then there's the fact most accountants will have tried down the years to lower your tax liability, claiming expenses that lower your profit and adding lump sums to pension pots.
'By income, we mean profit from self-employment if a sole trader, profit/drawings from partnership if in an LLP, or salary and dividends or salary and net profit if from a limited company and your shareholdings are 15%-25%+ ,' says Stiles. Different lenders, different rules HSBC, for instance, will use a director's share of profits, while other mainstream lenders will often use an average of two to three years' figures.