Overdrafts, practice loans, mortgages and credit

  • It sounds old fashioned, but it is helpful to have a good relationship with your bank manager. It is important to make sure that your bank understands that you are a self-employed barrister.
  • Some banks will require you to have a business account and will charge fees in relation to it. Banks may say that they require you to have a business account for tax reasons – this is not the case. Make sure you understand why the bank is suggesting it as part of their doing business with you. If in doubt, shop around!
  • In order to obtain loans and/or mortgages or other credit you will need accounts showing your income. It may also be necessary to provide evidence of your aged debt. Typically 3 years of accounts are needed to show a steady income for a mortgage. Often a mortgage provider will ask for your SA302s (your self-assessment tax calculations), particularly if you do your accounts yourself. If you have done your assessment by post or can’t access your online account you will need to get HMRC to print these for you. Ensure that you ask HMRC to fax them to you (they will not yet send by email): they may take up to 3 weeks to arrive by post.
  • Mortgage brokers may be best placed to help you, as they will know which institutions are likely to be prepared and happy to deal with self-employed individuals.
  • Aside from the usual commercial loans, some companies offer loans secured on your aged debt.