HMRC have announced that from 4 September 2017, they will stop issuing paper copies of clients’ tax calculations and tax year overviews for mortgage applications, insisting that they have come to an agreement with the Council of Mortgage Lenders for them to accept online print outs.
Up until recently HMRC, at a push, have issued SA302 statements setting out a person’s income and tax for each year and this has been an essential document for the self-employed and members of partnerships obtaining mortgages.
But in the last couple of years HMRC have made it increasingly difficult to obtain SA302’s and there seems to have been a lack of communication between what the mortgage industry requires and what HMRC is prepared to provide. In my experience this has been unsatisfactory as many mortgage brokers and lenders would not accept the substitute SA302 information or were unaware of the procedure. HMRC refused to provide the information and thus we as Accountants were faced with an accusation of being unhelpful.
As part of its drive towards digital tax HMRC now require every tax payer in this country to open a Personal Tax Accounts (PTA), although this message does not appear to have reached the public at large! Many routine matters can now be dealt with only through PTAs but Accountants cannot yet access clients’ PTAs.
Understandably, many clients either see no need for a PTA if they use an agent, or are confused by the fact that the Agent online service is different from a PTA.
HMRC said that the Council of Mortgage lenders will accept self-served copies of the tax calculation from the HMRC online account or the commercial software used to file the Self Assessment return and that the majority of lenders have now agreed to do so. I am able to provide these documents from my software and HMRC online account.
If a lender refuses to accept self-serve copies, HMRC suggests that agents check if they are on the List of Lenders who accept them.
In the future, anyone applying for a mortgage will need to either persuade their prospective lender that the new procedure is acceptable, or go through the process to open a PTA.