Christmas is a distant memory and the you've got the first few weeks of 2018 behind you. As the new year begins to take shape, we've teamed up with our partners CMME to take a look at what 2018 could bring for contractors and the self-employed.
With a number of important changes scheduled to take place, here are five things you should consider in preparation for your year.
1. No more issues with online SA302s
Over the course of last year, self-employed individuals looking to take out a mortgage have experienced a great deal of trouble getting lenders to accept print outs from HMRC online accounts. As the government tried to phase out paper copies of the SA302 document – which detailed an individual’s tax calculations and yearly tax overview and was required to complete the mortgage application process – and replace them with self-served online printouts, there were reports that many lenders were refusing to accept such printouts, leaving the self-employed and contractors unable to borrow.
However, with news that HMRC has come to an agreement with UK Finance and published a list of lenders who will accept the new digital copy, things are looking up for those self-employed workers looking to buy a new property. That being said, if you’re self-employed and feel like you need advice or assistance with your mortgage, it’s still a good idea to utilise a specialist brokers’ expertise.
2. Changes to PRA
From the 30th September 2017, changes to the regulations surrounding buy to let mortgages kicked in and began impacting the way portfolio landlords applied for a mortgage. The new PRA rules stipulate that any landlord with four or more mortgaged buy to let properties will be considered a portfolio landlord and will have to go through a series of new checks when they apply for a mortgage. This new checking process requires a great deal more paperwork and documentation and is more complex than the existing lending arrangements. If you’re a portfolio landlord and are thinking about taking out a new mortgage you may want to be prepared.
3. Think about mortgage protection
If you’re looking at taking out income protection insurance in 2018 it may be a good idea to take the idea seriously. This kind of insurance often protects you in the case of illness and can ensure your family aren’t encumbered with your mortgage payments should anything terrible happen. With the economic uncertainty of Brexit looming, this might be the time to look at your protection options.
4. Cut to dividend allowance
When the Chancellor of the Exchequer reaffirmed his commitment to cutting the Dividend Allowance from £5000 to £2000 in April 2018, many felt contractors were being unfairly targeted. However, this move will affect individuals in different ways depending on their personal financial circumstances. As we move into the new year, it’s vital that those affected by a cut in dividend allowance understand what it means for them and what they could expect to pay.
5. Stamp Duty Land Tax Relief
With the news of the Stamp Duty Land Tax (SDLT) relief for first time buyers coming in to effect in November 2017 it’s made it easier to buy a home this year, the new SDLT relief means that first time buyers will pay no SDLT on properties up to £300,000, and where the purchase price does not exceed £500,00 but is over £300,00 they will only pay 5% on the amount of the purchase price in excess of £300,000.
With the opportunity of saving thousands on buying your first home it’s an ideal time to take the first step onto the property ladder.