Mortgage for contractor operating as director of an umbrella company

tolow · 31-03-2022 8:58am #1

Hi All,

I tried using the search function and found some older threads but wondering if anyone has experience with the above. I am leaving my current full time permanent role to go contracting as a daily rate contractor for the first time, my daily rate will be over 400 euro. I know this will obviously put a hold on any mortgage applications but I am wondering what is the easiest way to set yourself up as a director of an umbrella company or as LTD company?

If operating as a director of an umbrella company what are the requirements when applying for a mortgage?

Thanks and I hope this is the correct forum.

DublinDilbert · 31-03-2022 9:12am

You will need to talk with an accountant, they should be able to guide you through the process. You are going to have to register for VAT too and make returns etc. When you setup a limited company, you will need to nominate directors. Is there a reason you are going as a limited company and not a sole-trader? Others here will be better able to advise on the advantages / disadvantages of each approach.

You will want a number of years trading and proof of Tax clearance before applying for a mortgage. Having an accountant will be useful at this time too. The problem with self employment is (or used to be) that you don't fit into a neat box on the application form. I have been mortgage approved as self employed, but it was definitely easier as a PAYE worker.

Royale with Cheese · 31-03-2022 9:45am

You will either be the director of your own limited company or an employee of an umbrella company, or sole trader.

I applied for a mortgage last year as a company director and they required three years of audited accounts along with tax clearance certs for both me and the company, I don't think a bank will touch you as the director of a company with no financial history. I got my first mortgage in 2015 and stayed in a full time job I hated and was being grossly underpaid in for a good 6-9 months until my property purchase went through and then quit and went contracting immediately afterwards.

I've no idea what a bank would require for a sole trader or umbrella company employee, it's possibly an option if you can't wait to leave your current job but as above you'd best ask an accountant. You could try a mortgage broker too, they'd know exactly what's required for each.

tolow · 31-03-2022 11:03am

https://www.fenero.ie/contractor-solutions/ Here are the details from the company I have used to setup. From the companies website ''Under our Umbrella Options you become a PAYE employee of the umbrella company for taxation purposes. You will also become either an Employee or a Director and Shareholder of the company''. I am not setting up as a LTD company.

I just wanted to see if anyone was in a similar position and how they found the application process just to know what to expect down the road.

31-03-2022 1:29pm

I did it just before Covid. I was contracting (through Fenero, as an umbrella director) for just under 18 months and got approval from EBS based on previous 3 years P60s with no issue. Had to supply my CV & current contract. Application process is no different than for anyone else otherwise.

tolow · 31-03-2022 2:03pm

https://www.boards.ie/discussion/comment/118860894#Comment_118860894

Brilliant, this is the kind of answer I was hoping to hear :) When completing salary certs etc for the bank I am assuming it was Fenero that done this for you? Are they helpful through the process?

Thanks

31-03-2022 2:19pm

Yes, Fenero are brilliant. From memory, the only involvement they had was the salary cert.

Mortgage for contractor operating as director of an umbrella company

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