Limited company directors have more income assessment routes than any other applicant type — salary plus dividends, salary plus net profit, retained earnings recognition, and day rate annualisation — and more ways to be undervalued by the wrong one. The right route depends on how your company earns and how you extract income, so we run every applicable calculation and place your application on the strongest one.
The traditional assessment for company directors adds your director's salary to the dividends you have drawn, usually averaged over the last two years of SA302s. It is the default at most mainstream lenders and the route most likely to undervalue a tax-efficient director.
A director drawing £13,000 salary and £42,000 dividends is assessed on £55,000 — regardless of whether the company billed £150,000 that year. If your drawings are deliberately modest for tax planning reasons, this route measures your tax strategy, not your earning capacity.
A growing number of lenders assess directors on their share of the company's net profit plus their salary. This recognises money earned by the company whether or not it was drawn — a far better fit for directors who retain earnings.
Using the same example: if the company's net profit after corporation tax was £95,000 and the salary £13,000, the assessable income becomes £108,000 — nearly double the salary-plus-dividends figure. For directors who own 100% of the company, the full net profit counts; for shared ownership, your percentage applies.
Ideal for directors with consistent salary and dividend income. This is the standard approach used by many mainstream lenders.
Suitable for business owners who retain profits in the company, allowing more of the company's earnings to be recognised.
For contracting directors, specialist lenders can assess your current contract day rate instead of company accounts or personal drawings.
We compare every assessment method and recommend the lender that offers the strongest borrowing potential for your business structure.
Directors whose company income comes from their own contracting — one person, one contract, one day rate — can usually bypass the accounts entirely. Specialist lenders annualise the day rate exactly as they would for any contractor: rate × 5 days × 46 or 48 weeks.
A contracting director on £600 per day is assessed on £138,000 — typically the highest figure of any route, available without filed accounts, and unaffected by drawings or retained profit decisions. For the substantial majority of contracting directors, this is the route we recommend.
A small number of lenders will consider retained profit held in the company as evidence of broader financial strength, either within a net profit assessment or as a compensating factor that supports a more generous overall view of the application.
This matters most for directors who have accumulated significant reserves over several years — the retained earnings demonstrate that the drawn income understates the financial position. It is a manual underwriting conversation rather than a formula, and we know which lenders are willing to have it.
Day rate route: current contract, work history, bank statements — no accounts required at most specialist lenders. Salary plus dividends: two years of SA302s and tax year overviews, plus dividend vouchers at some lenders. Net profit route: two years of full company accounts, SA302s, and often an accountant's certificate. Retained earnings: full accounts plus a current management accounts position or accountant's confirmation of reserves.
Where your accountant prepares a certificate, the format matters — lenders have specific certificate templates and qualification requirements (the accountant usually must be ACA, ACCA or CIMA qualified). We coordinate with your accountant so the paperwork is right the first time.
Whether you're paid through salary and dividends, retain company profits, or work as a contracting director, we'll compare every assessment method to find the lender that values your income correctly. Speak to our specialist team for tailored mortgage advice and access to lenders who understand limited company directors.