What is the outlook for interest rates?
UK interest rates were held at a record low for the 25th month in a row last week, which has posed questions to contractors who currently have a mortgage or are thinking of taking one. How long can this last? Should I assume rates will go up and take a 5 year fixed rate, or gamble that they will stay low and take the risk on a variable deal? Sound familiar?
Did you know? – Self Certified Mortgages are no more
Back in 2009 the Financial Services Authority (FSA) put an end to self-certification mortgages in an attempt to ensure that all borrowers prove their ability to repay in advance.
Self-certification mortgages were originally aimed at contractors, the self-employed and freelance/contract workers who had trouble proving their income and in many cases became the mortgage of choice for contractors on irregular income who struggled to secure mortgage borrowing with their bank..
As you may or may not be aware on 6th and 9th December 2010, HMRC released Ministerial Statements advising that legislation will be introduced to tackle arrangements involving trusts or other vehicles used to reward employees and that of disguised income.
To operate as a contractor you will have to have a private limited company, or use an umbrella company or other such scheme to get paid. In this article I aim to outline how to do each and the pros and cons of each choice.