You and your self-employed customers can enjoy even more time saving benefits thanks to a simpler policy and will now require only a one-year tax return, accompanied by confirmation that it’s been lodged to the ATO, to verify self-employed income for Connective Essentials applications with an LVR 80% or under.
For home lending applications with an LVR 80% or under:
- You can submit a one-year tax return, accompanied by confirmation that it’s been lodged to the ATO, to verify self-employed income for home lending applications with an LVR 80% or under.
- Over the coming months, we’ll update our credit policy and systems to reflect the change in policy.
- From March, tax returns will be the only document we accept to verify self-employed income for these applications.
- Until then, you can continue to provide two years of financial statements (profit & loss) to verify self-employed income for applications with an LVR 80% or under until further notice.
For home lending applications with LVR over 80%:
- There will be no change to the requirement to provide two years of financial information to verify self-employed income for home lending applications with an LVR over 80%.
- However, you’ll now be able to provide either two years’ tax returns or two years’ financial statements (profit & loss).
For home lending where financial statements are used to verify income:
- If you provide two years’ financial statements and want these to be assessed based on the most recent year, this option is still available when you provide commentary outlining why recent performance is a more appropriate indicator of future performance – as you do today.
Self-employed customers enjoy more benefits with Connective Essentials
- Removal of commentary requirements when using one-year tax return
- Less rework
- Simplified lending processes
- Faster ‘Time to Yes’
Applications that are ineligible for the one-year tax return option
- Where your customer’s tax return is yet to be lodged or only financial statements (profit & loss) are provided, the one-year tax return cannot be used.
- For applications that are higher than an 80% LVR follow the existing process.
- Any application submitted with two years’ worth of financial information will be assessed based on the existing policy.
What you need to do
Ask your self-employed customers for their most recent available tax return (2023 tax returns are acceptable under policy until 31 March 2025) and confirmation of lodgement for all eligible Connective Essentials applications.
The confirmation of lodgement needs to be from either their accountant or the ATO.
How to submit with one-year lodged tax return or using the most recent year’s income from financials
When submitting an application using the most recent year’s income information, please enter the same figure in both years in your lodgement system.
Further information
For more information get in touch with your CHL BDM.
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