Wednesday, December 11, 2013

And so it goes on

We have a couple of clients who are in the process of jointly purchasing a property. I should add that the property is in the names of their parents, the two clients are brothers although they aren't involved in the same business or even the same line of work.

Anyway they decided that they would put in a joint application as neither of them could afford the mortgage on their own. Brother A earns more than Brother C - their initials are easier to help me identify them! - and his application was accepted without question. Brother C is a bit more problematical, he doesn't earn as much as his older sibling but with all sources of income aggregated it was possible that he would get his mortgage application passed and indeed the bank gave a verbal commitment to him.

Today we had to complete the Accountants Certificate, this is usual practice, which includes a brief summary of the business activities over the last three years together with a projection for the next financial year and a summary of our clients personal income. All the sources of income equalled the required level of income and the certificate was faxed to the bank.  Within five minutes we had a phone call from Brother C saying that the bank had contacted him and that they weren't going to allow his dividend income as part of his income for mortgage purposes, this didn't make any sense at all not least because the form included a section for dividends. "I've just spoken to the bank who are asking if you can you change the dividends to PAYE income and disregard the other sources of income because they won't accept those either." I said I could change the income although there would be tax implications for his (Brother C) company."

Five minutes passed and then Brother A was on the phone, "I've just spoken to the bank, they have shredded the original certificate on the grounds that his income was too low, can you fill in another form with more income?" I replied that as it was a projection it wasn't an issue and duly completed a new form and sent it off.

A further five minutes passed and I get another phone call from Brother A, "They aren't allowing the dividend or other income for last year, can you change the income on last year."
"Well apart from the fact that the accounts have been submitted, his tax return has been submitted, the PAYE year end returns have been submitted and I would be committing fraud I don't see the problem," I replied somewhat sarcastically.

Long pause on the phone.

"Yes, I can see your point."


Span Ows said...

Is Brother A an ex boxer who owns a gym and Brother C an ex mechanic that owns a gambling club and they seem to have big men near them showing great respect at all times and some dodgy characters with violin cases?

Paul said...

They are two clients who we think have deliberately kept their income low to avoid taxes and now can't get a mortgage.

I was more shocked by the attitude of LLoyds Bank who are more or less saying 'name your price'. Problem is that lenders are now required to obtain proof of income from HMRC and so any lie I told would come back and bite me on the arse.

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