Mortgages

Virgin and Clydesdale amend lending policy for contractors impacted by IR35

Rozi Jones
|
29th July 2021
Virgin Money
"We understand that contractors need mortgage products that are flexible enough to accommodate their professional and financial situations"

Virgin Money and Clydesdale Bank have amended their criteria for lending to contractors.

IR35 changes in April impacted the setup between many contractors and their clients, and an increasing number of daily rate contractors are now paid via an umbrella company.

Virgin Money and Clydesdale Bank have both introduced policy to make sure that there is a clear lending solution for contractors impacted by IR35 or using an umbrella company seeking a mortgage.

The changes see Virgin Money and Clydesdale Bank implement the following:

- We will lend to contractors who fall inside IR35,
- Contractors paid via an umbrella (payroll service company) are acceptable,
- Where a contractor is paid via an umbrella the applicant must provide their last 2 months payslips where the gross pay is taken into account, after deduction of statutory employer costs (like employer NI and Apprenticeship Levy) and payroll service costs.

Other complex contractor situations will be assessed manually by an underwriter and considered on an individual case by case basis.

Sarah Green, head of customer acquisition at Virgin Money said: “As a bank we understand that contractors need mortgage products that are flexible enough to accommodate their professional and financial situations and that is why, following the IR35 changes we have made these positive amendments to our lending policy.”

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