Reply to: Halifax won't give mortgage due to IR35 and contract wording

[CloudWalker]

As long as the details are in the assignment schedule that should be acceptable.

Great, I'll be in touch soon for a decision in principle

[Freelancer Financials]

I've just secured a new gig but my contact dose not show my rate / hours , as the pimp says its is shown in the assignment note? Problem?

As long as the details are in the assignment schedule that should be acceptable.

[CloudWalker]

I've just secured a new gig but my contact dose not show my rate / hours , as the pimp says its is shown in the assignment note? Problem?

[Freelancer Financials]

so how did they get around the 5 day problem? I have the same issue, agency won't confirm 5 day working week and underwriter at Halifax say they need this!! Help!!

It really does depend on the underwriter dealing with your application. In most cases this can be done by presenting your time sheets along with your business bank statements.

Halifax is definitely the best lender when it comes to contractors, however, if you're slightly outside their criteria e.g. contract doesn't state the number of days worked per week, then it reverts to manual underwriting which takes longer. It's definitely doable just delays the process whilst further evidence is used to confirm this.

[northernladuk]

so how did they get around the 5 day problem? I have the same issue, agency won't confirm 5 day working week and underwriter at Halifax say they need this!! Help!!

Have you spoken to Freelance Financials as they seemed to have pulled it off according to this thread?

[lumper]

How did they do it?

Congratulations to Freelancer Finacials in pulling this off. After many months of agonising frustration and umteen emails and protracted liasing, Halifax came through with a offer this minute !!! FLF certianly tried their best and can be recommended as a good broker.

so how did they get around the 5 day problem? I have the same issue, agency won't confirm 5 day working week and underwriter at Halifax say they need this!! Help!!

[Daventry]

Well now broker says Halifax is happy with my bank statements and want to see my contract extension - which I already sent to the broker last month (sigh)

[bodillc]

How long have they taken?

My broker received all my paperwork by 1st April but I suspect they didn't send it to Halifax until 7th April (I do because they asked again for my passport on such date...).

Last week Halifax asked for one more bank statement from my wife.

With the long weekend I guess I won't hear from them before Wednesday.

Regards.

It seems to depend very much on each circumstance. Sorry to sound so vague, but each application has its own bearing on the decision taken.
Lets just say mine took long, but got there in the end !!

[Daventry]

Congratulations to Freelancer Finacials in pulling this off. After many months of agonising frustration and umteen emails and protracted liasing, Halifax came through with a offer this minute !!! FLF certianly tried their best and can be recommended as a good broker.

How long have they taken?

My broker received all my paperwork by 1st April but I suspect they didn't send it to Halifax until 7th April (I do because they asked again for my passport on such date...).

Last week Halifax asked for one more bank statement from my wife.

With the long weekend I guess I won't hear from them before Wednesday.

Regards.

[Freelancer Financials]

Congratulations to Freelancer Finacials in pulling this off. After many months of agonising frustration and umteen emails and protracted liasing, Halifax came through with a offer this minute !!! FLF certianly tried their best and can be recommended as a good broker.

Cheers Bodillc

[bodillc]

Congratulations to Freelancer Finacials in pulling this off. After many months of agonising frustration and umteen emails and protracted liasing, Halifax came through with a offer this minute !!! FLF certianly tried their best and can be recommended as a good broker.

[bodillc]

With respect the problem here lies with your agent’s inflexibility. I suspect this stems from a lack of proper understanding of IR35. From my experience a lack of understanding will result in IR35 been ignored or over compensated for. In this case the latter. The agent fears that by acknowledging a particular number of hours worked each week, that this will constitute control over the contractor. Control is one of the pre-requisite conditions for IR35 to apply. The connection between working hours and control is indirect and rather weak.

The requirement to conform to a usual working week is common to almost all contractors and is merely a logistical practicality and will not usually be taken as meaning a contractor is controlled providing that their contract is properly drafted to be outside of IR35 i.e. the contract should make it clear that the contractor is solely responsible for deciding the means and methods adopted to carry out the contract works. The work provider will set the time limits and parameters to be met but the contractor will use their own judgment to decide how the work is carried out. Contractors do not work in isolation in a goldfish bowl; they provide their services in a real world environment which necessitates liaising with and working alongside permies who work 9 to 5, 5 days a week. It is a logistical practical requirement that they must broadly work similar hours to the staff that they are required to communicate with on a daily basis in order to effectively provide the services they have been contracted to carry out. We should also keep in mind that the information of working hours is requested by the Halifax as part of standard criteria for assessing contractors solely for its underwriting purposes. The agent is not asked to provide this information to HM Revenue & Custom as part of an IR35 enquiry!

Moving on from this, I’m quite confident that the broker dealing with your mortgage will overcome this issue by presenting your time sheets and business bank statements. I am also happy to look into this for you if you send me a PM and let me know which broker you are dealing with.

John Yerou
MD of Freelancer Financials

Hi John,
Thanks for the reply.
However, there is no need to intermediate. I am happy with FLF as I went through 6-8 brokers and got let down by all of them before FLF were able to help me out ! I wasted a month or more and lost precious time with these previous brokers for silly reasons ( like missing gaps in my non-contiguous contracts ).
The issue I have with the 5-day wording ( 8 hours is in the contract, but not 5 days a week !!! ) / IR35 contract is that I am caught inbetween the Halifax broker, your rep. (SB ) and my agency ! I am just the contractor and if the agency refuses to assist me in changing my contract to stipulate days worked , then what say do I have ? As far as I am concerned, all parties should be willing to be flexible as they all stand to benefit ! The agency:- I'll just get another contract if they are stubborn and unhelpful; FLF:- I'll go to another broker; and Halifax:- I'll select a better lender. Simple, as far as I see it.
The other problem I have is that over 2 months have passed since this " agreement in principle" has passed and the estate agent has been extra patient, never mind the poor vendor who is in the chain and waiting for Halifax to get going ! The checks by the solicitors were done ages ago and if this all falls through, I stand to lose the house and the estate agent will have to put the new house back on the market and start all over again...3 months wasted !

Today is supposed to be D-day for FLF and Halifax !!!
cheers

[Freelancer Financials]

I think you really need to sack your broker and go to another one who understands how the mortgage system works for self-employed people...

Contractor mortgages tend to be based on a starting position of published accounts of your one-man Ltd co. If you have years of relatively good contracting behind you and can back that up with annual accounts and tax records to show your total income (salary plus dividends) then you can get some pretty good rates even in these days of tighter mortgage control.

Hi Craig,

I think you're getting Self Employed mortgages mixed-up with what a Contractor Mortgage is?

Limited company directors can be assessed either on a Self-Employed basis using their accounts or on their contract rate, which is a Contractor Mortgage. A good broker will look at accounts and contract rate to determine the best solution.

[Freelancer Financials]

It might just be me living in my little world but I've never seen a contractor mortgage done on current day rate before.

Now you know!

[Qdos Contractor]

Purely from an IR35 perspective, if the parties agree that the services are going to be provided for 5 days a week I see no issues in detailing that in the contract. Obviously if the client starts stipulating set working hours, lunch breaks etc. then it may become a problem - but a simple mutual agreement between the companies won't be a problem.