A Day rate contractor? Watch the video below…
Are you a day rate contractor for project work within one of the following sectors: IT, Banking, Engineering, Oil/Gas, Management, Medical, Legal or Other ?
Like most contractor clients, you may typically earn a rate per day x5 days per week over the period of the fixed term contract, however contractors have various options to structure their income be it through a limited company or an umbrella company. So their taxable pay can be much less than the gross day rate they invoice or annual turnover of the limited company.
Most High Street Lenders insist on using your salary and dividend income as the basis upon how much you will be able to borrow.
However, we work with specialist lenders who understand that your gross Day Rate is the basis upon which lending can be provided irrespective of how much income ( Salary & Dividends) is taken from your limited company or umbrella structure.
Have a look at a recent Case Study:
Case Study – Day Rate Contractor
Mr R M ( South East) A Day rate contractor within the airline industry, was earning £500 per day on a 12 month contract. He had 2.5 years previous experience in a similar capacity, but had taken a 6 month sabbatical 18 months ago.
Mr R D uses an accountant and directs his day rate income through a Ltd company, whereby the most recent year he paid himself £30,000 per annum with £20,000 dividends and his wife £10,000 for admin services to his limited company.
After visiting a high St lender the maximum they could borrow using the combined income was only £270,000
After further discussions with us, we spoke with our panel of specialist lenders, the result was;
The couple were able to borrow £517,000 and fund the purchase of their new dream home. In addition the couple opted not to sell their existing home to release the deposit and kept this on a BTL basis which is self funding and will provide a good investment pension option in the long term.
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