Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, tax, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.
If you’re self-employed or operate as a sole trader, it can sometimes be hard to prove your income. In addition to your invoices and bank statements, you can also demonstrate your earnings with an SA302 tax calculation, sometimes known as a Self Assessment Statement.
You’ll have access to this document as long as you’re registered with HMRC and have completed at least one Self-Assessment tax return. The SA302 is essentially a tax calculation that allows lenders and other concerned parties to gain insight into your income history and credit score.
In this article, we’ll explain what an SA302 is in detail and the circumstances in which you might need one.
What is an SA302?
An SA302 form is a summary of your income as reported to HMRC. It’s essentially an income statement formed from your Self Assessment tax return. It shows your income, tax allowance and the tax you’ve paid/owe. In short, it proves how much income you’ve made in a fiscal year. It can therefore be used by banks and lenders to verify your income and assess how creditworthy you are.
Who fills in an SA302 form?
An SA302 can be obtained by anyone who is self-employed and fills in a Self Assessment form to pay income tax and national insurance.
Compared to employed people with PAYE (Pay As You Earn), it can be more difficult to verify a self-employed person’s income. That’s why banks often request an SA302 form.
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Is SA302 the same as tax overview?
While SA302 and Tax Year Overview both summarise your total income and state the amount of tax submitted to HMRC in the tax year, SA302 is slightly more detailed. For example, the SA302 shows all tax calculations for the year, while the Tax Year Overview only outlines the tax return totals and payments received by HMRC.
Typically, banks and mortgage lenders will be more interested in seeing your SA302 rather than your annual tax overview. This is because it gives a more detailed picture of your financial situation.
Why do you need a SA302?
The SA302 is an easy and trusted way to prove your income as a freelancer or sole trader. It verifies your income claims in an official form, which banks are much more likely to take seriously than just your invoices.
What does an SA302 self-assessment form include?
The SA302 form presents proof of your earnings and income in the tax year. It consists of two separate sections: Tax Calculation and Tax Overview.
In the Tax Calculation section, you will see all your declared earnings and the income tax you owe.
The Tax Overview section, meanwhile, will show the status of your tax payments – i.e. what’s been paid and what is still owed.
Why do I need an SA302?
An SA302 is typically required when applying for a loan as a self-employed person. That can be either a business loan, a personal one or a mortgage. Due to UK legislation around lending and borrowing, lenders are required to see evidence of an applicant’s income. For sole traders, this evidence can come in the form of an SA302.
How do I get a SA302 as a self-employed person?
If you require a Self Assessment tax form, you will need to request one form HMRC. This is fairly simple to do. You can get hold of an SA302 in the following 3 ways:
- Download your form online
If you file your Self Assessment tax return online, you will be able to download the SA302 from your HMRC account. Simply log on, go to ‘Self Assessment’, click ‘More Self Assessment Details” and “Get Your SA302 Tax Calculation”. From there you can download and print it.
- Ask your accountant for a copy
Another option is to ask your accountant to generate, download and print out your SA302 form. They can do this using accounting software and the Self Assessment tax return information they have. Note that if you opt for this route, your accountant will need to certify the document before you can submit it to your lender.
- Request a printed copy from HMRC
If you prefer not to do this online or via your accountant, you can also phone HMRC to request a paper copy by post. You will need to have your National Insurance number and Self Assessment Unique Taxpayer Reference (UTR) and other personal information to hand when you call them. This is so they can verify your identity and account.
Note that this is also the lengthiest method as it can take up to two whole weeks for your SA302 to arrive in the post after you’ve requested it.
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