For the use of mortgage intermediaries & other professionals only

Self-employed income calculation changes

From Tuesday 17 October, the amount of income used in our affordability calculation for all self-employed applications will be the latest year or the average of the last two years, whichever is lower.

This is a change for applications where the self-employed income is up to £50,000 in the ‘previous year’ and applies to new applications started from Tuesday 17 October. If an application was started before Tuesday 17 October, including where just a Decision In Principle (DIP) was keyed, the income calculation will not change, i.e., it will be the lower of the last two years.

We continue to adapt our approach in response to broker feedback and the market to ensure we support customers while lending responsibly. The alignment of the approach enhances affordability for self-employed applicants on lower incomes.

As a reminder, the latest Tax Calculations and Tax Year Overviews for any new applications must now be for tax year 2022 / 2023.

There are no other changes to self-employed income criteria or verification.

Where a business has been trading for one full year, but less than two years, an application can be considered.

Please read our self-employed income criteria for more details. This will be updated from 17 October.