Borrowing when you work for yourself

Many self-employed people earn more in some months than others.

A lender still needs to see what you earn over a year. With the right papers to hand, you can show them.

These notes are for sole traders and partners in the UK who are thinking about a loan or a mortgage.

Showing what you earn

Once you have sent your Self Assessment tax return, HMRC can give you a tax calculation, known as an SA302. You can get one for each of the last four years. You can also get a tax year overview for any year.

GOV.UK says you might be asked for these as evidence of income, for example for a mortgage. If you file online, you can print them yourself from your HMRC online account, 72 hours after you send the return. If you use commercial software, you print the calculation from that software.

Some lenders do not accept documents you have printed yourself. It is worth asking before you apply.

Records that tell your story

Sole traders and partners must keep records of business income and expenses. You also need records of your personal income.

Records must be kept for at least five years after the 31 January filing deadline for that tax year. The same records help when a lender asks how your income has moved.

Making Tax Digital for Income Tax is arriving in stages. From 6 April 2026 it applies to people whose qualifying income was over £50,000 in the 2024 to 2025 tax year. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

Sending your return in good time

An online return for the tax year that ended on 5 April 2026 is due by 11:59pm on 31 January 2027. A paper return for that year must reach HMRC by 11:59pm on 31 October 2026.

Your SA302 for a year only exists once that return is in. Sending it early means your newest figures are ready sooner.

Checking your credit file

Lenders use credit reference agencies to look at how you have handled borrowing. The three agencies are Experian, Equifax and TransUnion.

You have the right to a free statutory copy of your file from each one. If something is wrong, you can ask for it to be corrected. You can also add a short note, called a notice of correction, to explain a past problem.

Being on the electoral register at your address appears on your file. Each application also leaves a search on it, so a few well chosen applications are better than many.

Weighing up a loan

Citizens Advice suggests working out your budget first. It also suggests looking at the total amount you will repay, not only the rate. A shorter repayment period can matter more than a slightly lower APR.

A secured loan is tied to your home, and you can lose your home if you do not keep up the repayments. If you are offered payment protection insurance, check it covers you, because many policies do not cover self-employed people.

If a lender says no

A lender that turns you down after checking your file must tell you which agency it used. You can then check the information it saw.

Lenders score people differently, so one refusal does not mean every lender will refuse. A local credit union is another place to ask. Business Debtline gives free, confidential advice to self-employed people who are worried about debt.