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2mo ago

HMRC Systems Failure Locks Self-Employed Out of Mortgages

HMRC has apologised for the ongoing record errors without setting a timeline to resolve them, leaving lenders unable to verify self-employed earnings

The Government scrapped class 2 national insurance contributions last year Photographer: Andy Andrews Provider: Getty Images Source: Digital Vision Copyright: Andy Andrews
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Overview

  • HMRC’s legacy systems still show class 2 National Insurance contributions as payable and fail to reflect the mid-2024 rise in capital gains tax to 24 percent.
  • The latest fault prevents self-employed taxpayers from downloading official SA302 forms because HMRC’s systems are failing to generate correct tax calculations and year overviews.
  • Mortgage lenders require an exact match between applicants’ declared earnings and HMRC records, prompting widespread rejections of self-employed mortgage and remortgage applications.
  • Some lenders accept letters from accountants to explain discrepancies but such workarounds are inconsistent and impose unpaid administrative burdens on tax professionals.
  • HMRC has acknowledged the issue and apologised without providing a timeline for correction, triggering criticism and renewed calls to modernise the tax authority’s digital infrastructure.