---
title: "One Year Self-Employed Mortgages, 1 Year's Accounts"
description: "One year self-employed mortgages: lenders that accept one year's accounts, part-year first tax returns, new directors and contractors, and when to wait."
url: "https://mortgagelane.com/mortgages/one-year-self-employed-mortgages"
site: "Mortgage Lane"
collection: "mortgages"
date: "2026-10-08"
author: "Joseph Lane"
category: "Mortgages"
reviewed: "2026-10-08"
reading_time: "38 min"
byline: "Joseph Lane"
author_credentials: "CeMAP · FCA authorised firm"
language: "en-GB"
robots: "index,follow"
---

# One Year Self-Employed Mortgages, 1 Year's Accounts

One year self-employed mortgages: lenders that accept one year's accounts, part-year first tax returns, new directors and contractors, and when to wait.

One year self-employed mortgages: lenders that accept one year's accounts, part-year first tax returns, new directors and contractors, and when to wait.

[Trading history](https://mortgagelane.com/definitions?term=trading-history)

Lending and affordability

The length of time a self-employed borrower or their business has been trading, which lenders measure in years of tax calculations, accounts or contracts.

[Read the full definition of Trading history](https://mortgagelane.com/definitions?term=trading-history)

## Expert advice on one year self-employed mortgages

Speak to a Mortgage Lane adviser about your options.

## In short

Yes, some lenders accept one year of self-employed figures, from one tax calculation or twelve months of accounts, and assess that year's net profit, or a director's or contractor's equivalent. The choice is wider where the work continues a previous job in the same field. Because a first tax return runs from the start date to 5 April, the evidence you hold often decides how much a lender will use.

## What is a one year self-employed mortgage?

**A one year self-employed mortgage is a residential or [buy to let](https://mortgagelane.com/definitions#def-buy-to-let-mortgage) mortgage assessed on one year of self-employed income, from one [tax calculation](https://mortgagelane.com/definitions#def-sa302), one set of accounts or twelve months of contracting, by a lender that accepts one year where others ask for two.** The mortgage itself is an ordinary one. A mortgage on a home you will live in is a [regulated mortgage](https://mortgagelane.com/definitions#def-regulated-mortgage) under the [Financial Conduct Authority](https://mortgagelane.com/definitions#def-financial-conduct-authority)'s mortgage conduct rules, and most buy to let lending is business lending outside them. Those rules require a lender to obtain evidence of the income you declare, and they bar it from accepting self-certification of income ([FCA Handbook: MCOB 11.6.8R](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). With one year of figures, the questions are which evidence exists and whether the lender will use it.

Lenders measure [trading history](https://mortgagelane.com/definitions#def-trading-history) in years of figures, and each sets its own minimum. Some want two years, some lend with less than two years of accounts once one full year exists, and some consider less than a year where the work continues an employed role. One high street bank's published criteria, checked in October 2026, consider a business that has traded for one full year, ask for accounts covering that year where the history is shorter than two years, and say the year does not need to be a tax year. With one year a lender cannot see a trend, so it looks for signs the income will continue: a track record in the same work before self-employment, contracts or regular clients, and current trading in line with the year it assesses. The income it reads is that year's net profit for a sole trader or partner, salary and [dividends](https://mortgagelane.com/definitions#def-dividend-income) or a share of the company's profit for a director, or the annualised day rate for a contractor.

The evidence is often the harder part of a first-year case. A sole trader's first tax year runs from the day the business starts to 5 April, so the first tax return can cover only a few months of trading, and that short figure is the one a lender sees if it reads the return as filed. Twelve months of accounts, a lender willing to annualise the part year, or waiting for the next return are the ways around it, and the dates decide which of them is open. Our [self-employed mortgages](https://mortgagelane.com/mortgages/self-employed-mortgages) page covers every structure in full.

Mortgage Lane arranges mortgages for the newly self-employed, in their first year or two of trading: employees who have gone freelance in the same field, tradespeople and professionals who have set up on their own, directors of newly formed companies, contractors on a first contract, and sole traders whose first return covers part of a year. That includes purchases, first-time buyers, home moves, [remortgages](https://mortgagelane.com/definitions#def-remortgage) and buy to let. Most of the work is setting the start date and the return periods against each lender's rules before an application is made.

On an illustrative sole trader's first year, the part-year return as filed supports £105,000 at 5 times income, while twelve months of accounts for the same business support £190,000. The lender's choice of evidence, not the business, makes the difference.

## One year self-employed mortgage rates

**One year self-employed mortgage rates are set by each lender for each product, and the trading history mainly changes which lenders and products are open to you.** Lenders price residential mortgages in [loan to value (LTV)](https://mortgagelane.com/definitions#def-loan-to-value) bands, so a larger deposit can move a case into a cheaper band. A lender that accepts one year on its standard criteria prices the case as it would any other at that loan to value. Where a part-year return, a history shorter than a year or another complication takes the case to a [specialist lender](https://mortgagelane.com/definitions#def-specialist-lending), the rate and the product fees are that lender's. Fewer lenders accept one year than accept two, so there are fewer products to compare at each band.

The next tax return or set of accounts adds a second year of figures, and that can open lenders that wanted two years. A shorter fixed rate can end once those figures exist, while a longer one gives certain payments for longer but can carry an [early repayment charge](https://mortgagelane.com/definitions#def-early-repayment-charge) if you leave early. Our [fixed term mortgages](https://mortgagelane.com/mortgages/fixed-term-mortgages) page explains how fixed rates are priced.

**In your first year or two of self-employment?** Get in touch with your start date, your first tax return or accounts and details of your previous job. Those three facts decide whether to apply now or wait for the next return.

## One year self-employed mortgage criteria

**Lenders ask the same questions on every first-year case, and each lender sets its own answers.** Three rows in the table rest on published rules: the part-year row on the tax year rule in the Income Tax (Trading and Other Income) Act 2005, the evidence row on the FCA's rule on income evidence, and the regulation row on the rules of the FCA and the [Prudential Regulation Authority](https://mortgagelane.com/definitions#def-prudential-regulation-authority) (PRA). [HMRC](https://mortgagelane.com/definitions#def-hm-revenue-and-customs)'s Self Assessment deadlines and the [Making Tax Digital](https://mortgagelane.com/definitions#def-making-tax-digital) thresholds, as at October 2026, are in the section on part-year returns below. The other rows describe how lenders' own criteria differ, and those criteria change often. In Mortgage Lane's experience the standard residential [income multiple](https://mortgagelane.com/definitions#def-loan-to-income) is 5 times gross income after credit commitments, up to 6 times for professionals and specialist products, applied to whichever income figure the lender accepts and within its own [affordability](https://mortgagelane.com/definitions#def-affordability) assessment. Residential lending on the cases we arrange usually goes up to 95% loan to value, which our [95% mortgages](https://mortgagelane.com/mortgages/95-percent-mortgages) page covers.

## One year self-employed mortgage criteria

*One year self-employed mortgage criteria*

| Criterion | How it works for a one-year case |
| --- | --- |
| Minimum trading history | Set by each lender. Some accept one full year of figures, some want two, and some consider less where the work continues an employed role in the same field. |
| Continuity | Previous employment in the same field strengthens a one-year case, and some lenders require it. |
| Evidence | An HMRC tax calculation (SA302) and tax year overview, twelve months of accounts, or the current contract for a day-rate contractor. FCA rules require the lender to obtain evidence of income and bar self-certification. |
| Part-year first return | A first tax year runs from the start date to 5 April. Some lenders accept twelve months of accounts instead, some may annualise the part year, and others wait for a full-year return. |
| Income used | Net profit for sole traders and partners; salary plus dividends, or salary plus a share of net profit, for directors; the annualised day rate for contractors. |
| Current trading | Recent personal and business bank statements and, where the lender asks, year-to-date figures showing the income continuing. |
| Income multiple | In our experience 5 times gross income after credit commitments, up to 6 times for professionals and specialist products, applied to the income the lender accepts. |
| Loan to value | Set by the lender and the product. Residential lending on the cases we arrange usually goes up to 95%. Some lenders set a lower maximum for a short trading history. |
| Accountant | Some lenders that read accounts or an accountant's certificate require a qualified accountant, and each sets which qualifications it accepts. |
| Tax position | Return filed and tax paid, or an HMRC payment plan in place. The first January payment can include a first payment on account. |
| Credit | Clean credit widens the choice. One year of figures with adverse credit narrows it, and in our experience adverse credit lending usually stops at around 90%. |
| Regulation | A mortgage on your own home is regulated by the FCA. Most buy to let lending is not; banks and building societies test the rent under the PRA's SS13/16. |

The part-year row is from the Income Tax (Trading and Other Income) Act 2005, section 7, the evidence row from FCA rule MCOB 11.6.8R and the regulation row from the FCA and the PRA's SS13/16, checked 8 October 2026. The multiple and the 95% and 90% figures are Mortgage Lane's experience, not market rules. The other rows describe how lenders vary; each lender's criteria and underwriting decide a case.

## Types of first-year self-employed case, and how each is assessed

**The one-year question applies to every self-employed structure, and each structure meets it with different evidence.**

### Employees who went self-employed in the same field

This case usually has the widest choice of lenders with one year of figures, for example an employed electrician who becomes a sole trader or an accountant who leaves a firm to set up a practice. The lender sees continuous income in the same occupation, so the year of self-employment reads as a continuation of the earlier job. Payslips, a P60 or a reference from the previous employer show the earlier income, and the self-employed year shows that the work has carried on. Some lenders accept one year only on these terms, and where a lender will consider annualising a short first return, continuity in the same work is one of the things it is likely to look for.

**Get in touch** with your first year's figures and your employment history before you went self-employed.

### New businesses in a new field

A borrower who has started a line of work they have not done before has no earlier record to point to, so the lender leans harder on the year's figures, current trading and the deposit. Some lenders that accept one year for a continuing occupation want two for a new venture. A first year that shows a loss, or a profit well below what the business now earns, can point towards waiting for the next return.

**Get in touch** with your figures to date and your bank statements, so the timing can be checked first.

### Sole traders and partners with a part-year first return

Income tax is charged on the profits of the tax year, and a business's first tax year runs from its start date to 5 April. The first return can therefore cover anything from a few days to almost a whole year of trading, and it understates a full year's profit. The first return for a full tax year cannot be filed until after the following 5 April. A partner is taxed on their share of the partnership's profits for the tax year in the same way. Our page on [partnership mortgages](https://mortgagelane.com/mortgages/partnership-mortgages) works through the first returns of a newly promoted partner. The [sole trader mortgages](https://mortgagelane.com/mortgages/sole-trader-mortgages) page covers how lenders read a sole trader's profit once there is more than one year, and the worked example below takes one case through the options.

**Get in touch** with your start date, your accounting date and your first return.

### Directors of a newly formed company

A limited company's first accounts run from the day it is incorporated to its accounting reference date, which is the last day of the month in which the first anniversary of incorporation falls, so the first period is usually a little over twelve months. The company can shorten that period, or extend it to a maximum of 18 months, and a private company whose first accounts cover more than twelve months has 21 months from incorporation to file them ([gov.uk: preparing and filing Companies House accounts](https://www.gov.uk/government/publications/life-of-a-company-annual-requirements/life-of-a-company-part-1-accounts)). A Company Tax Return cannot cover more than twelve months, so a longer first period of accounts means two tax returns ([gov.uk: first company accounts and Company Tax Return](https://www.gov.uk/first-company-accounts-and-return)).

Lenders assessing a [company director mortgage](https://mortgagelane.com/definitions#def-company-director-mortgage) read the income in two main ways. A lender using salary and dividends reads the director's own tax calculation, which covers what the director drew in the tax year. A lender using salary plus a share of net profit reads the company's accounts, which can include [profit retained in the company](https://mortgagelane.com/definitions#def-retained-profit), and it wants a full year of trading in them, so a first period much shorter than twelve months narrows the choice. Some lenders count the trading history from the date the business started when a sole trader incorporates, so the change of structure does not restart the clock. In our experience shareholding matters as well: some lenders ignore a holding under 19% and others one of 24% or less, so a minority shareholder may be assessed on payslips like an employee. The [mortgages for limited company directors](https://mortgagelane.com/mortgages/limited-company-director-mortgages) page sets out both readings.

**Get in touch** with the company's first accounts, your tax calculation and your shareholding.

### Contractors on a first contract

A day-rate contractor can be assessed on the contract instead of tax returns, which changes the one-year question. Lenders that offer a [contractor mortgage](https://mortgagelane.com/definitions#def-contractor-mortgage) annualise the day rate: our usual working basis is the day rate times 5 days times 48 weeks, and some lenders' published criteria, as at October 2026, use 46 weeks. Lenders differ on a first contract. Some consider one where the earlier employment was in the same field, others want a contracting history first, and each will want the current contract and its remaining term. In our experience contractor cases sit within the lender's standard residential loan to value bands. The [contractor mortgages](https://mortgagelane.com/mortgages/contractor-mortgages) and [IT contractor mortgages](https://mortgagelane.com/mortgages/it-contractor-mortgages) pages cover the rules, including pay through an [umbrella company](https://mortgagelane.com/definitions#def-umbrella-company).

**Get in touch** with your contract, your CV and how you are paid.

### Fixed-term contract workers

Someone employed on a [fixed-term contract](https://mortgagelane.com/definitions#def-fixed-term-contract-mortgage) is an employee, so tax returns and trading history do not come into it. The questions are the time left on the contract, the track record on contract and any probation period. On the cases we arrange, specialist lenders can accept no track record on contract and applicants still in probation, while high street lenders usually prefer six to twelve months first. The [fixed term contract mortgages](https://mortgagelane.com/mortgages/fixed-term-contract-mortgages) page covers renewals and gaps between contracts.

**Get in touch** with your contract dates, your payslips and any earlier contracts.

### CIS subcontractors in their first year

A construction subcontractor paid under the Construction Industry Scheme may have a route that does not depend on a full tax year. Some lenders read CIS payment and deduction statements over a number of months and count earlier employed work in construction towards their time-in-trade rules, while others assess CIS workers as self-employed on tax calculations. The [CIS mortgages](https://mortgagelane.com/mortgages/cis-mortgages) page sets out how the published rules differ.

**Get in touch** with your CIS statements and bank statements.

### Newly self-employed for less than a year

With no completed year, the choice of lenders is at its narrowest. The FCA's guidance lets a lender take account of projected income for a self-employed customer where the projection forms part of a credible business plan ([FCA Handbook: MCOB 11.6.9G](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)), and whether a lender does so is its own policy. Some lenders consider interim accounts or an accountant's projection where the work continues an employed role, and contractors can sometimes be assessed on the day rate from the first contract. Waiting until a full year of figures exists usually widens the choice, and the worked example below shows how far the evidence route can move the figure. If a lender has already turned down an application on trading history, our [declined mortgages](https://mortgagelane.com/insights/declined-mortgages) and [mortgage declined after application](https://mortgagelane.com/mortgages/mortgage-declined-after-application) pages cover what to do next.

**Get in touch** to compare applying now with waiting.

### Employed and self-employed at the same time

Someone who keeps a job while building a business, or who has a salary from one source and self-employed income from another, can have both counted. The FCA's guidance recognises income from more than one source, and lenders that accept both use payslips for the job and tax calculations or accounts for the self-employment, applying their own trading history rule to the second. Income from a job you have already left is not counted, because it will not pay the mortgage. Where the employed income alone supports the loan, the self-employed year may not need to count at all.

**Get in touch** with your payslips and your self-employed figures.

### Buy to let in the first year of self-employment

A buy to let mortgage is assessed mainly on the rent. Banks and building societies test the rent against the interest at a stressed rate under the PRA's underwriting standards ([PRA: SS13/16](https://www.bankofengland.co.uk/prudential-regulation/publication/2016/underwriting-standards-for-buy-to-let-mortgage-contracts-ss)), and other lenders set their own tests. Personal income still matters at some lenders, for a minimum income rule or to support the rent, and some buy to let lenders want two years of self-employed figures where they read that income at all. In our experience most lenders no longer set a minimum income of £25,000. The [buy to let mortgage for self-employed borrowers](https://mortgagelane.com/guides/buy-to-let-mortgage-guide/self-employed-borrowers) guide covers the landlord side.

**Get in touch** with the property, the expected rent and your figures.

### Remortgaging with one year of self-employment

A remortgage to a new lender is assessed on the same one-year evidence as a purchase. A [product transfer](https://mortgagelane.com/definitions#def-product-transfer) to a new deal with your existing lender is different: where there is no extra borrowing and no change to the terms that matters for affordability, the FCA's rules do not require the lender to reassess affordability ([FCA Handbook: MCOB 11.6.3R](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). For someone who became self-employed after taking the current mortgage, that can be the simpler route until a second year of figures exists. Extra borrowing is assessed on the one-year evidence like any new loan.

**Get in touch** with your current deal's end date and your figures.

### One year of self-employment and adverse credit

[Defaults](https://mortgagelane.com/definitions#def-credit-default), [county court judgments](https://mortgagelane.com/definitions#def-county-court-judgment) or [missed payments](https://mortgagelane.com/definitions#def-missed-payment) alongside a short trading history narrow the choice, and the case can end up with a specialist lender. Each entry is read on its date, size and status, together with the year's income and the deposit, and in our experience [adverse credit](https://mortgagelane.com/definitions#def-adverse-credit) lending usually stops at around 90% loan to value ([90% LTV mortgages](https://mortgagelane.com/mortgages/90-ltv-mortgages)). The [CCJ mortgages](https://mortgagelane.com/mortgages/ccj-mortgages) and [mortgages with defaults](https://mortgagelane.com/mortgages/mortgages-with-defaults) pages cover how lenders grade each entry.

**Get in touch** with your credit reports and your figures.

## What lenders look for in a one year self-employed application

**Around the income figure, lenders check whether a single year is a fair guide to the next one.** Continuity of occupation comes first. Self-employment that continues an employed role in the same field reads as lower risk than a new venture, and some lenders require it for a one-year case. The year must also be a full one: a lender assessing one year wants twelve months of figures, so a first return covering part of a year needs one of the routes in the next section.

The income must be continuing. Recent personal and business bank statements show money arriving, and some lenders ask for year-to-date figures or an accountant's letter to show that current trading is in line with the year assessed. A first year that ends well below what the business earns now can be explained to an [underwriter](https://mortgagelane.com/definitions#def-underwriting), but a lender reads the evidence it accepts, and a higher current figure counts only where the lender has a route for it.

Lenders also check the tax position: whether the return has been filed and the tax paid. In the first year the January payment can cover more than one year's tax. Someone who made no payments on account the year before pays the full tax for the year in January. Unless the bill was under £1,000, or more than 80% of it was paid at source, they also make a first payment on account towards the next year, usually half the previous year's tax ([gov.uk: payments on account](https://www.gov.uk/understand-self-assessment-bill/payments-on-account)). Tax owed and not yet paid is a commitment, and a lender can ask about any HMRC payment plan set up to pay a bill in instalments ([gov.uk: if you cannot pay your tax bill on time](https://www.gov.uk/difficulties-paying-hmrc)).

A larger deposit and a loan well within the income multiple leave more lenders whose limits a one-year case meets. Where one year of income does not reach the loan, a family member's income on a [joint borrower sole proprietor](https://mortgagelane.com/definitions#def-joint-borrower-sole-proprietor) mortgage ([JBSP mortgages](https://mortgagelane.com/mortgages/jbsp-mortgages)) or a larger deposit can close the gap.

The first January tax bill after starting can include the year's full tax plus a first payment on account, usually half as much again, unless the bill was under £1,000 or over 80% was paid at source. Lenders check it has been paid.

## The first-year evidence problem: part-year tax returns

**Since the 2024 to 2025 tax year every sole trader and partner has been taxed on the profits arising in the tax year itself ([Income Tax (Trading and Other Income) Act 2005, section 7](https://www.legislation.gov.uk/ukpga/2005/5/section/7)), and a business's first tax year runs from its start date to 5 April.** Someone who started on 1 September has seven months and five days on their first return; someone who started on 1 March has 36 days. A lender reading that return sees a fraction of a year's profit.

The first tax year ran from the start date to 5 April under the old basis period rules too ([ITTOIA 2005, section 199, as it stood in 2023](https://www.legislation.gov.uk/ukpga/2005/5/section/199/2023-04-06)). The tax year basis changed the second year. Up to 2022 to 2023, a business with an accounting date in its second tax year was usually taxed that year on its first twelve months of trading, so the second return showed a full year from the start. The 2023 to 2024 tax year was a transitional year ([HMRC Business Income Manual: BIM81250](https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim81250)), and now the second return covers 6 April to 5 April, like every later one.

Where accounts are drawn up to a date other than 31 March to 5 April, the profit for each tax year is apportioned from the accounts, generally in proportion to the number of days ([HMRC Business Income Manual: BIM81201](https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim81201)). That ties the first return to the first accounts, which may not be finished by the filing deadline, and a return can then carry provisional figures to be corrected later ([HMRC: SALF206, provisional figures](https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf206)). Whether a lender will read a return with provisional figures is its own decision.

HMRC's deadlines set the timetable. Someone who starts self-employment must register for Self Assessment by 5 October after the end of the tax year in which they started, and the online return is due by 31 January ([gov.uk: Self Assessment deadlines](https://www.gov.uk/self-assessment-tax-returns/deadlines)). The SA302 tax calculation and tax year overview that lenders read can be printed from the HMRC online account 72 hours after the return is sent. Where an accountant files with commercial software, the calculation comes from that software and the tax year overview from the HMRC account ([gov.uk: get your SA302 tax calculation](https://www.gov.uk/sa302-tax-calculation)). A return can be filed as soon as the tax year ends on 5 April, so the first full-year figures can reach a lender in April, months before the January deadline.

There are four routes around a short first return, and each lender decides which of them it offers.

## Routes around a part-year first return

*Routes around a part-year first return*

| Route | Evidence | Which lenders | When it is available |
| --- | --- | --- | --- |
| Twelve months of accounts | Accounts for the first twelve months of trading, prepared by an accountant, which can run across two tax years | Some lenders that accept accounts in place of tax calculations | Once the twelve months have passed and the accounts are prepared |
| Annualised part year | The first return's profit scaled up to twelve months | Some lenders, at their discretion; continuity in the same work helps | Once the first return is filed and the tax calculation can be printed |
| Wait for the next return | The first return for a full tax year | Any lender that accepts one year of figures | From 6 April after the first full tax year, once the return is filed |
| Contractor day rate | The current contract and the contracting history | Lenders with a contractor policy, independently of the tax returns | From the contract, subject to the lender's history rules |

How lenders vary, not any lender's rule: each lender decides which of these routes it offers. Filing and printing times from gov.uk Self Assessment deadlines and SA302 guidance, checked 8 October 2026.

### Making Tax Digital for Income Tax

Making Tax Digital for Income Tax adds a further record, though usually not in a business's first year. As at October 2026, sole traders and landlords whose qualifying income was over £50,000 in 2024 to 2025 have had to keep digital records and send quarterly updates since 6 April 2026. The threshold falls to £30,000 from 6 April 2027, tested on 2025 to 2026 income, and to £20,000 from 6 April 2028, tested on 2026 to 2027 income ([gov.uk: find out if and when you need to use Making Tax Digital](https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax); [Income Tax (Digital Obligations) Regulations 2026](https://www.legislation.gov.uk/uksi/2026/336/made)). Qualifying income is turnover from self-employment and property before expenses, taken from the previous year's return, and HMRC annualises a sole trader's part-year income to test it, so six months of trading in a first tax year is doubled ([gov.uk: work out your qualifying income](https://www.gov.uk/guidance/work-out-your-qualifying-income-for-making-tax-digital-for-income-tax)). A business that started in 2025 to 2026 therefore has to join the rules from 6 April 2027 at the earliest. The same applies where the owner already uses Making Tax Digital for property or another business: HMRC's guidance starts quarterly updates for a new business after its first tax return, unless the owner chooses to report it from the start ([gov.uk: add or cease income sources](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/add-or-cease-income-sources)).

Quarterly updates are totals of income and expenses, and they do not replace the tax return, which is still due by 31 January ([gov.uk: use Making Tax Digital for Income Tax](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/introduction)). The published lender criteria we checked in October 2026 ask for tax calculations and tax year overviews, or accounts, and whether a lender will look at quarterly figures as support for current trading is its own decision.

## Apply now or wait for the next tax return?

**Applying now works when the evidence you already hold produces a figure close to what the business earns.** That is the case where twelve months of accounts exist and a lender accepts them, where a full-year return has already been filed, or where a contractor can be assessed on the day rate. Waiting makes sense where the only evidence is a short part-year return, where the business is new to you, or where the next return will show a clearly higher profit.

Waiting has costs of its own: rent paid in the meantime, prices that may move, and on a remortgage a fixed rate ending and the lender's reversion rate starting, which a product transfer can cover. On a purchase the cost of waiting is set against the larger loan or wider choice the next return may bring, and the timing is predictable, because the next return can be filed from 6 April and, through HMRC's online service, its tax calculation printed 72 hours later. An [agreement in principle](https://mortgagelane.com/definitions#def-agreement-in-principle) on the current figures shows what a lender would consider now, and it can be compared with the figure the next return is likely to support.

## How a one year self-employed mortgage is arranged

1. **Dates and evidence.** The start date, the accounting date, the period each return covers, the accounts and the previous employment set side by side, with the routes each one opens.
2. **Lender match.** The income worked out under each candidate lender's rules (the return as filed, annualised, or twelve months of accounts; salary and dividends or a share of profit; the day rate), set against the loan and the deposit, and the lender chosen on its trading history, continuity and loan to value rules.
3. **Agreement in principle and full application.** An agreement in principle on the assessed income, then the application with the tax calculation and tax year overview, the accounts or contract, bank statements and evidence of previous employment.
4. **Underwriting questions.** Continuity, current trading, the tax position and any part-year figures explained to the underwriter, with the accountant's help where the lender asks for it.
5. **Offer, completion and the next step.** The mortgage offer and completion, with the product term chosen with the second year's figures in mind, because they can open more lenders at the next remortgage.

## A part-year first return: the arithmetic

**A sole trader one year into self-employment can present a lender with three different incomes, depending on which evidence it accepts.**

### Step 1. The dates

An illustrative electrician leaves employment and starts as a sole trader on 1 September 2025, doing the same work for some of the same customers. The accounts are drawn up to 5 April, so each period of account matches a tax year, and the accountant also prepares a set of accounts for the first twelve months for the mortgage application. In October 2026 the electrician wants to buy a £200,000 home with a £20,000 deposit: a loan of £180,000, at 90% loan to value.

## Step 1 figures: the dates

*Step 1 figures: the dates*

| Event | Date or period | What it means for the evidence |
| --- | --- | --- |
| Starts trading as a sole trader | 1 September 2025 | Accounts drawn up to 5 April, so each period of account matches a tax year |
| First tax year, 2025 to 2026 | 1 September 2025 to 5 April 2026, 217 days | The first return shows £21,000 of net profit |
| Registers for Self Assessment | By 5 October 2026 | HMRC's deadline for a business that started in 2025 to 2026 |
| Files the 2025 to 2026 return | Any time from 6 April 2026; online deadline 31 January 2027 | Filed online with HMRC, the tax calculation and tax year overview can be printed 72 hours later; commercial software gives the calculation itself |
| First twelve months of accounts | 1 September 2025 to 31 August 2026 | Prepared by the accountant for the application, across two tax years; £38,000 of net profit |
| First full tax year, 2026 to 2027 | 6 April 2026 to 5 April 2027 | The return can be filed from 6 April 2027; online deadline 31 January 2028 |

Illustrative case on hypothetical figures. The tax year rule is from ITTOIA 2005 section 7; the registration, filing and printing dates are from gov.uk Self Assessment deadlines and SA302 guidance, checked 8 October 2026.

### Step 2. Three readings of the same year

The table works each reading at 5 times income, the standard multiple in Mortgage Lane's experience, with no other credit commitments. It adds a variant of the annualised reading, because the first period is 217 days, a little more than seven whole months, and a lender working from the exact dates would count days.

## Step 2 figures: three readings of the same year

*Step 2 figures: three readings of the same year*

| Evidence the lender accepts | Income assessed | Maximum loan at 5 times | Against the £180,000 loan needed |
| --- | --- | --- | --- |
| 2025 to 2026 return as filed | £21,000 | £105,000 | £75,000 short |
| Same return annualised by months, £21,000 ÷ 7 × 12 | £36,000 | £180,000 | Covers it exactly |
| Same return annualised by days, £21,000 ÷ 217 × 365 | £35,323 | £176,612 | £3,388 short |
| Twelve months of accounts to 31 August 2026 | £38,000 | £190,000 | £10,000 to spare |

Illustrative arithmetic on hypothetical figures, worked with the calculator on this page. 5 times income is Mortgage Lane's experience of the standard residential multiple, not a lender term, and each lender's affordability assessment decides the actual loan. Which readings a lender offers is its own decision. Not an offer of finance.

A lender reading the part-year return as filed lends a little over half what a lender accepting the twelve-month accounts would, on the same business in the same month: £105,000 against £190,000. The annualised readings land close to the accounts because the electrician's profit was fairly even: about £2,940 a month over the first 217 days and about £3,490 a month over the 148 days after it. A business with a seasonal pattern or a slow start would see the readings spread further apart. The method of annualising also matters at the margin: on a day count the same return supports £3,388 less than the loan needed. Worked over 30 years at 5.2%, the illustrative rate used across our guides and not a product rate, the monthly payment on £180,000 is £988.40.

### Step 3. If the accounts ran to 31 August

Had the electrician chosen 31 August as the accounting date, the first period of account would run from 1 September 2025 to 31 August 2026, and the 2025 to 2026 return would carry a share of that period's profit apportioned by days: £38,000 × 217 ÷ 365, or £22,592. The return could not be finished until the accounts were, or it would go in with provisional figures. Annualised on the same day count, that return gives £38,000 again: whichever accounting date is used, the full year's profit is £38,000, and the twelve-month accounts are the evidence that shows it. The choice of accounting date is a tax and accounting decision, and an accountant or tax adviser can say which suits the business.

### Step 4. The continuity factor

Because the electrician did the same work as an employee, lenders that annualise or accept twelve-month accounts can treat the income as continuous with the earlier salary. A borrower who started a new kind of business could find fewer lenders willing to use either route, and waiting for the 2026 to 2027 return would be the likelier path. That return covers 6 April 2026 to 5 April 2027, the business's first full tax year, and it can be filed from 6 April 2027, with the tax calculation printable 72 hours after an online filing.

### What decides the case

The start date and the year's profit are fixed by the time you apply. You control the accounting date, whether twelve-month accounts are prepared, when you apply and the size of the deposit, and the broker's job is matching that evidence to a lender that will use it. Set the start date against the return periods first, because every later choice depends on what the returns can show.

The [first-time buyer mortgage guide](https://mortgagelane.com/guides/first-time-buyer-mortgage-guide) covers the schemes and deposits open to a first purchase, and [gifted deposit mortgages](https://mortgagelane.com/mortgages/gifted-deposit-mortgages) covers family help with the deposit, which can lower the loan a one-year income has to support.

## Related topics

- [2026](https://mortgagelane.com/mortgages/self-employed-mortgages)Mortgage[Self-Employed Mortgages, Sole Traders, Directors and CIS](https://mortgagelane.com/mortgages/self-employed-mortgages)Self-employed mortgages for sole traders, partners, directors, contractors and CIS workers: how lenders read each income, the documents and one year's accounts.[Read more about Self-Employed Mortgages, Sole Traders, Directors and CIS](https://mortgagelane.com/mortgages/self-employed-mortgages)
- [2026](https://mortgagelane.com/mortgages/cis-mortgages)Mortgage[CIS Mortgages, Construction Industry Scheme](https://mortgagelane.com/mortgages/cis-mortgages)How lenders assess CIS subcontractors for a mortgage: time in CIS, months of evidence, gross or net income, and limited company, partnership and gross payment status cases.[Read more about CIS Mortgages, Construction Industry Scheme](https://mortgagelane.com/mortgages/cis-mortgages)
- [2026](https://mortgagelane.com/mortgages/mortgages-with-defaults)Mortgage[Mortgages with Defaults, Lender Tiers and Secured Defaults](https://mortgagelane.com/mortgages/mortgages-with-defaults)Mortgages with defaults: which lenders accept them, how date, value and settled status set the tier, and why a default on a mortgage counts for more.[Read more about Mortgages with Defaults, Lender Tiers and Secured Defaults](https://mortgagelane.com/mortgages/mortgages-with-defaults)

## One year self-employed mortgage calculator

The calculator reads one year of self-employment three ways: the first tax return as filed, the same return annualised over the months it covers, and twelve months of accounts. The starting figures are the illustration on this page, an electrician with £21,000 on a seven-month first return, £38,000 in twelve months of accounts and a £200,000 purchase. Enter your own figures, and move the months to see how far a short first return understates the year.

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Indicative estimate only, subject to lender criteria, affordability and valuation. Each lender decides which evidence it accepts for a first year of self-employment and whether it will annualise a part-year return, so the three readings and the loan to value limit are assumptions, not lender terms. This is not a mortgage offer. Your home may be repossessed if you do not keep up repayments on your mortgage.

## Frequently asked questions about one year self-employed mortgages

**Q: Can I get a mortgage with one year of self-employment?**

faq-id: can-i-get-a-mortgage-with-one-year-of-self-employment

Yes, some lenders accept one year of self-employment, assessed on a single tax calculation or twelve months of accounts in place of two years of figures. The choice is wider where the work continues a job you did as an employee, and the income used is that year's net profit, or a director's or contractor's equivalent. A first tax return runs from the business's start date to 5 April, so it can cover only part of a year, and the evidence you hold often decides how much a lender will use. In our experience the standard residential multiple is 5 times gross income after credit commitments, up to 6 times for professionals and specialist products.

**Q: Do all lenders need two years of accounts?**

faq-id: do-all-lenders-need-two-years-of-accounts

No. Some lenders accept one full year of self-employed figures, while others still ask for two, and each lender sets its own minimum. Lenders that accept one year look for signs the income will continue, such as earlier employment in the same field and recent bank statements in line with the year assessed. Some link the figures they use to the size of the loan: one published policy, checked in October 2026, for borrowers with two years of figures, uses the latest year alone up to 75% of the property's value and the two-year average above that, and runs a separate range for one year's figures. Contractors and CIS subcontractors can have routes that do not depend on accounts at all.

**Q: How much can I borrow with one year's accounts?**

faq-id: how-much-can-i-borrow-with-one-year-s-accounts

With one year's accounts, the lender applies its usual income multiple and affordability assessment to the income it accepts from that year. In Mortgage Lane's experience the standard multiple is 5 times gross income after credit commitments, up to 6 times for professionals and specialist products, so £38,000 of net profit supports £190,000 at 5 times before the lender's other checks. The income figure is the year's net profit for a sole trader, salary and dividends or a share of company profit for a director, or the annualised day rate for a contractor. Where the first tax return covers only part of a year, the evidence the lender accepts can change the answer by tens of thousands of pounds.

**Q: Do one year self-employed mortgages have higher rates?**

faq-id: do-one-year-self-employed-mortgages-have-higher-rates

Not necessarily. A lender that accepts one year of figures on its standard criteria prices the case by product and loan to value, as it would for any other borrower. Fewer lenders accept one year than accept two, so there are fewer products to compare at each loan to value band. Where a part-year return, less than a year of trading or another complication means a specialist lender, that lender's own rates and fees apply. A larger deposit can move a case into a cheaper loan to value band, and a second year of figures can open more lenders at the next remortgage.

**Q: Why does my first tax return cover less than a year?**

faq-id: why-does-my-first-tax-return-cover-less-than-a-year

Your first tax return covers less than a year because income tax is charged on the profits of the tax year, which runs from 6 April to 5 April, and your first tax year starts on the day the business starts. A business that started on 1 September files a first return covering seven months and five days. The first year worked this way under the old basis period rules and still does under the tax year basis that has applied since 2024 to 2025 ([legislation.gov.uk: ITTOIA 2005, section 7](https://www.legislation.gov.uk/ukpga/2005/5/section/7)). The return therefore understates a full year's income, which is why some lenders look at twelve months of accounts instead.

**Q: Can a lender annualise a part-year tax return?**

faq-id: can-a-lender-annualise-a-part-year-tax-return

Some lenders will consider annualising a part-year first tax return, scaling the profit up to twelve months, and it is a decision for each lender's criteria and underwriter. Continuity in the same work as a previous job is one of the things a lender is likely to look for first. Other lenders want twelve months of accounts instead, or wait for the first full tax-year return. The method matters too: a first return covering seven months and five days gives a slightly higher figure annualised over seven months than on a day count. Where the business draws its accounts to a date other than 31 March to 5 April, the first return is itself a share of the first accounts, apportioned by days.

**Q: Can I use twelve months of accounts instead of a tax return?**

faq-id: can-i-use-twelve-months-of-accounts-instead-of-a-tax-return

Some lenders accept twelve months of accounts in place of a tax calculation, which helps when the first tax return covers only part of a year. The accounts can run across two tax years, for example from 1 September 2025 to 31 August 2026, and the lender assesses the net profit they show. Lenders that accept accounts set their own rules on who prepares them, and some require a qualified accountant. A lender may also ask for the tax return and bank statements alongside the accounts, so the figures need to be consistent. Not every lender offers this route, so it is a point to check before applying.

**Q: What documents do I need for a one year self-employed mortgage?**

faq-id: what-documents-do-i-need-for-a-one-year-self-employed-mortgage

For a one year self-employed mortgage you usually need your HMRC tax calculation (SA302) and tax year overview for the year, or twelve months of accounts, plus recent personal and business bank statements, evidence of your previous employment where it shows continuity, identification and proof of your deposit. Directors may also need the company's accounts, and contractors their current contract. If you file through HMRC's online service you can print the tax calculation and overview from your online account 72 hours after you send the return; a return filed with commercial software gives the calculation through that software ([gov.uk: get your SA302 tax calculation](https://www.gov.uk/sa302-tax-calculation)). The exact list, including how many months of bank statements, is set by each lender.

**Q: Do I need an accountant with one year of self-employment?**

faq-id: do-i-need-an-accountant-with-one-year-of-self-employment

Not always. A lender that reads your HMRC tax calculation and tax year overview can use a return you filed yourself. An accountant becomes necessary where the route depends on accounts or an accountant's certificate, such as twelve months of accounts in place of a part-year return, because some lenders require those to be prepared by a qualified accountant and each sets which qualifications it accepts. A limited company files accounts every year, so directors often have an accountant already. An accountant can also advise on the accounting date and how it affects the first returns, which is tax advice a mortgage broker does not give.

**Q: Can I get a mortgage if I have been self-employed for less than a year?**

faq-id: can-i-get-a-mortgage-if-i-have-been-self-employed-for-less-than-a-year

Possibly, though the choice of lenders is at its narrowest before a full year of trading. Some lenders consider a case where the work continues an employed role, supported by interim accounts or an accountant's projection, and the FCA's guidance allows a lender to take account of projected self-employed income that forms part of a credible business plan ([FCA Handbook: MCOB 11.6.9G](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). Day-rate contractors can sometimes be assessed on the contract from the start. For other newly self-employed borrowers, waiting until a full year of figures exists usually widens the choice.

**Q: Does previous employment help a one year self-employed application?**

faq-id: does-previous-employment-help-a-one-year-self-employed-application

Yes. Previous employment in the same field helps because the lender sees continuous income in the same occupation, so the year of self-employment reads as a continuation of the earlier job. Some lenders require it before they accept one year of figures, and it is one of the things a lender is likely to look for before it considers annualising a short first return or reading an accountant's projection. Payslips, P60s or a reference from the earlier employer show it. A new business in a field you have not worked in has no such record, so the year's figures, current trading and the deposit carry more weight.

**Q: Should I wait for two years of accounts before applying?**

faq-id: should-i-wait-for-two-years-of-accounts-before-applying

Waiting makes sense where the first year's evidence understates the business, the work is new to you, or the next return will show a clearly higher profit. Where twelve months of accounts or a full-year return already exist and a lender accepts them, applying now is often possible. Waiting has costs, including rent, moving prices and, on a remortgage, a fixed rate ending. The timing is predictable, because a return can be filed from 6 April and, filed online with HMRC, the tax calculation printed 72 hours later, so the next year's figures can reach a lender months before the 31 January deadline. A broker can compare the loan available now with the likely figure after the next return.

**Q: Can a company director get a mortgage with one year of accounts?**

faq-id: can-a-company-director-get-a-mortgage-with-one-year-of-accounts

Some lenders accept one full year of company accounts for a director, assessed on salary plus dividends from the director's tax calculation or on salary plus a share of net profit from the accounts. A company's first accounts run from incorporation to the last day of the month of its first anniversary, so they usually cover a little over twelve months, and a first period much shorter than twelve months narrows the choice ([gov.uk: preparing and filing Companies House accounts](https://www.gov.uk/government/publications/life-of-a-company-annual-requirements/life-of-a-company-part-1-accounts)). Previous employment in the same field helps. In our experience some lenders ignore a shareholding under 19% and others one of 24% or less, so a minority shareholder may be assessed on payslips like an employee.

**Q: Can a contractor get a mortgage in their first year?**

faq-id: can-a-contractor-get-a-mortgage-in-their-first-year

A day-rate contractor can get a mortgage in their first year from lenders that assess the contract rate instead of tax returns. Our usual working basis is the day rate times 5 days times 48 weeks, and some lenders' published criteria, as at October 2026, use 46 weeks. Some lenders consider a first contract where the earlier employment was in the same field, others want a contracting history first, and the lender will want the current contract and its remaining term. On the cases we arrange, contractors are assessed within the lender's standard residential loan to value bands. Someone employed on a fixed-term contract is assessed as an employee, under different rules.

**Q: Can I get a buy to let mortgage with one year of self-employment?**

faq-id: can-i-get-a-buy-to-let-mortgage-with-one-year-of-self-employment

Some buy to let lenders accept one year of self-employment, because the loan is assessed mainly on the rent. Banks and building societies test the rent against the interest at a stressed rate under the Prudential Regulation Authority's underwriting standards ([PRA: SS13/16](https://www.bankofengland.co.uk/prudential-regulation/publication/2016/underwriting-standards-for-buy-to-let-mortgage-contracts-ss)), and other lenders set their own tests. Some lenders also look at personal income, for a minimum income rule or to support the rent, and some want two years of self-employed figures where they read that income at all. In our experience most lenders no longer set a minimum income of £25,000. Most buy to let mortgages are not regulated by the FCA.

**Q: Can I remortgage with one year of self-employment?**

faq-id: can-i-remortgage-with-one-year-of-self-employment

Yes, with a lender that accepts one year of figures, and a remortgage to a new lender needs the same evidence as a purchase. A product transfer to a new deal with your existing lender can be simpler: where there is no extra borrowing and no change to the terms that matters for affordability, the FCA's rules do not require the lender to reassess affordability ([FCA Handbook: MCOB 11.6.3R](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). For someone who became self-employed after taking the current mortgage, that can bridge the gap until a second year of figures opens more lenders. Extra borrowing at a remortgage is assessed on the one-year evidence.

**Q: What deposit do I need with one year of self-employment?**

faq-id: what-deposit-do-i-need-with-one-year-of-self-employment

With one year of self-employment a 5% deposit can be enough, because residential lending on the cases we arrange usually goes up to 95% loan to value, but the lender and the product set the minimum. In our experience family help mortgages, with a relative's support, can go to 100% loan to value. Some lenders set a lower maximum loan to value for a short trading history. With adverse credit as well, lending in our experience usually stops at around 90%. A larger deposit, and a loan well within the income multiple, leaves more lenders whose limits the case meets.

**Q: Does Making Tax Digital help with a one year self-employed mortgage?**

faq-id: does-making-tax-digital-help-with-a-one-year-self-employed-mortgage

Not usually in the first year. Making Tax Digital for Income Tax adds quarterly updates of income and expenses. As at October 2026 it applies once a tax return shows qualifying income, meaning turnover from self-employment and property before expenses, over the threshold: £50,000 from 6 April 2026, £30,000 from 6 April 2027 and £20,000 from 6 April 2028 ([gov.uk: Making Tax Digital for Income Tax](https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax)). A new business joins only after its first return, even for someone already using Making Tax Digital, unless they choose to report it from the start ([gov.uk: add or cease income sources](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/add-or-cease-income-sources)). Quarterly updates do not replace the tax return, and lender criteria we checked in October 2026 ask for tax calculations and overviews, or accounts.

**Q: Can I get a one year self-employed mortgage with bad credit?**

faq-id: can-i-get-a-one-year-self-employed-mortgage-with-bad-credit

Possibly. A one year self-employed borrower with defaults, county court judgments or missed payments can be considered by some specialist lenders, though the combination of a short history and adverse credit narrows the choice. Each entry is read on its date, size and whether it has been settled, together with the year's income and the deposit. In our experience lending with adverse credit usually stops at around 90% loan to value, so a 10% deposit is a realistic starting point. Waiting for a second year of figures, or for the entries to age, can widen the choice.

**Q: Will my income from employment and self-employment be combined?**

faq-id: will-my-income-from-employment-and-self-employment-be-combined

Lenders can combine evidenced income from a job and from self-employment where both continue, using payslips for the employment and a tax calculation or accounts for the self-employment. The FCA's guidance recognises income from more than one source, and its rules require evidence of a suitable type and period for each part of the income a lender relies on ([FCA Handbook: MCOB 11.6](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). Each lender applies its own trading history rule to the self-employed part, so with one year it may count the salary in full and the self-employed income only if it accepts one year. Income from a job you have already left is not counted, because it will not pay the mortgage.

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Published: 2026-10-08

Last reviewed: 2026-10-08

Source: https://mortgagelane.com/mortgages/one-year-self-employed-mortgages