Self-employment income criteria  

In this section we cover:

Proof of self-employment income

You can provide the latest two years' HMRC Tax Calculation (SA302) forms and tax year overviews or an accountant's certificate detailing the latest two years' accounts.

Clients who self-assess and submit their tax returns online

Gov.uk shows your client how to get copies of their SA302 and Tax Year Overviews.

Clients who self-assess and submit paper tax returns

HMRC will send a paper copy of the tax calculation to your client after the tax return has been processed. However they will not automatically send the tax year overviews.

If your client cannot access their online account and/or requires a paper copy of the tax calculation, they'll need to contact HMRC and request both:

  • the latest two years' tax calculations
  • the corresponding two years' tax year overviews

Commercial software tax calculations produced by accountants in conjunction with the HMRC online tax year overview are also acceptable.

Accountant's certificates

If your client's income will be verified using an accountant's certificate, the completed certificate will need to include details of a minimum trading period of two years. The latest year end can't be more than 18 months ago.

We'll send an accountant's certificate directly to your client's accountant to complete and return to us. You don't need to request this.

All accountant's certificates must be prepared and signed by a professionally qualified Associate or Fellow.

A Chartered Accountant can't certify their own self-employed income.

Back to top

Limited Companies

If your client operates a Limited Company, in most circumstances we will treat them as self employed.

Company Directors

We'll need to see the last two years' income. If the last accounting period is greater than 12 months, the income figures will be annualised.


  • We cannot accept drafts and projections.
  • The latest year end cannot be more than 18 months ago.

We'll use the lower of:

  • the most recent year's salary and dividends or
  • the average of the last two years' salary and dividends.

Directors with 20% or lower shareholding

If your client has a 20% or lower shareholding in the Limited Company, we will treat them as employed and use their payslip(s) to confirm income as appropriate.

If the payslip income is not enough to support the loan requested, we will treat them as self employed. For example, where we need to include dividend income. In this scenario, key as more than 20% shareholder.

Directors who have been self-employed for less than two years

Your client is working as part of a business and now owns a share of the business or has become a partner in the firm, but has been a partner/self-employed for less than two years.

For example, an employed solicitor, doctor, accountant or architect has recently been invited to become a partner in the firm they work for.

We'll need to see a letter from the Senior Partner, Accountant or Practice Manager that:

  • confirms the partnership is well established
  • the date the applicant became a partner
  • their expected income in the next 12 months.

Director's salary or dividends

We need to see either:

  • The latest two years' HMRC Tax Calculation (SA302) forms and tax year overviews. or
  • An accountant's certificate covering at least the last two years

Note:

Contact us if your client is an existing Nationwide borrower and can’t meet the required criteria. Some applications can be referred to our senior underwriters.

Company accounts

We reserve the right to request information such as Company accounts. If we request this:

  • You must provide Final Accounts. Drafts and projections are not acceptable.
  • The end of the latest financial period shown on the accounts must not be more than 18 months ago.
  • If the last accounting period is greater than 12 months, the income figures will be annualised.

Download our guide to HMRC tax calculation (PDF, 317KB) and tax year overview requirements for more information

Back to top

Sole traders and partnerships

We'll need to see the last two years' income.

We'll use the lower of:

  • the most recent year's net profit/share of net profit or
  • the average of the last two years' salary and dividends.
Back to top

Contractors

Where an applicant is a fixed term contractor and has been trading on a self-employed basis for two or more years, they can be considered as self employed.

We'll use the lower of:

  • the most recent year's income or
  • the average of the last two years' income.

If the contractor's Limited Company is in more than one name and the names do not exactly match the application, then the applicant(s) can only proceed on a self-employed basis with income verified by HMRC documents or an accountant's certificate. The applicant(s) must have been self-employed for a minimum of two years.

For example, for a joint remortgage application where the contractor's Limited Company is in the names of both applicants and a third person, the case may only proceed with the fixed term contractor keyed as self-employed.

You do not need to provide details of the contractor's Limited Company unless we request them.

If your client wants to be treated as employed instead of self-employed, see our employment income criteria for employed contractors.

Back to top

Subcontractors

Where a subcontractor is working as an individual and invoices their employer, only basic rate tax (currently 20% for registered, or 30% for unregistered subcontractors) is deducted by the employer. This is commonly seen as a CIS deduction on the payslip. In these cases, the applicant should be treated as self-employed.

If a subcontractor's employer deducts full PAYE tax and National Insurance, refer to fixed term contracts on our employment income page.

Back to top

Seafarers Earning Deduction (SED)

If your client works on a ship outside the UK and claims Seafarers Earning Deduction, they may be self-employed.

We'll need to see the latest two years' UK tax calculations and corresponding tax year overviews. The latest tax year overview must show no UK tax has been charged or paid.

See our employment income criteria for information on SED for employed or contractors.

Back to top