Every 5th of October marks an important milestone in the world of taxes as the tax computations, also known as SA302's, for the previous year become 18 months old. This particular timing often leads to confusion among borrowers, especially when it comes to lenders' requirements for the most recent year's tax returns. While HMRC does not mandate the submission of these returns until the end of January, lenders have their reasons for requesting the most up-to-date financial information.
One of the primary reasons lenders ask for the latest tax returns is by reviewing the most recent tax & income information, lenders can assess the borrower's affordability and overall financial health, which plays a crucial role in determining their eligibility for mortgages.
While it may seem puzzling that lenders require the most recent tax returns earlier than HMRC's deadline, this practice is rooted in the need for accurate and updated financial data to make informed lending decisions. Therefore, borrowers and those who may need to make an application in the coming months are encouraged to stay proactive in preparing and submitting their tax returns to facilitate a smooth and efficient borrowing process.
Almost all lenders require that the latest personal tax returns are no older than 18 months and its important to have these available to ensure you have the maximum number of lenders to select your next mortgage deal from.
If you have any questions, don't hesitate to contact our friendly team - 01603 961618
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