It’s rarely just a five-minute job.

You have found the perfect house. The mortgage broker tells you the loan is “pretty much guaranteed”, the estate agent is hovering eagerly, and you are already deciding where to put the sofa. Then your lender chimes in with a seemingly innocent request: “We just need a signed reference from your accountant.”

At this point, many small business owners think: “Grand, I will give Blue Penguin a quick bell, they will sign a piece of paper, five minutes sorted.”

If it genuinely were a five-minute job, we would not send you a bill for it. We love helping our clients move onto bigger and better things, and we are not in the habit of charging you every time you pick up the phone. That’s the remit of solicitors, and old-school accountants. 

But when a bank asks for an accountant’s certificate, they are rarely asking for five minutes of our time. Usually, they want something closer to War and Peace. Some banks also want us to essentially sign off on your ability to service your mortgage in the future – which of course brings with it a whole bunch of separate challenges. 

(You might also be asking, quietly, why your broker didn’t mention any of this before. And so you should – what else have they forgot to mention??)

What is a mortgage reference anyway?

A mortgage reference can mean two very different things depending on your income sources, and the size of loan you’re after.

On one hand, it might simply be factual confirmation of figures. The lender asks to see your completed Tax Return, alongside proof that it has been filed to HMRC, and the tax has actually been paid.

We prepare every client’s tax return with lenders in mind. You’ve probably been asked for an SA302 Form – we include it as standard with all our tax returns, and you can download these from the Engager document portal right now: Client Portal – Blue Penguin 

You’ll also be asked for a Tax Year Overview (TYO). You can get this directly from your Personal Tax Account with HMRC

Collating these for two or three tax years won’t cost you anything if you’re happy to do it yourself. Alternatively, if you’re strapped for time or just hate paperwork, one of our team can get everything together and send it directly to your broker. There’s a small admin fee of £40 + vat for our time.

Banks Often Want More

Frustratingly, lenders increasingly demand bespoke, detailed financial reports, both historical and forward-looking. 

They do not just want the numbers. They want our professional opinion on whether your business will maintain its profitability over the next few years. They ask for full dividend breakdowns, payslips, company accounts, trading forecasts, and very nearly your inside leg measurement.

If you trade through a Limited Company, the lender will often demand two separate references: one for you as an individual director/shareholder, and one for the company itself.

Providing that level of detail takes time. We have to review the questions carefully (each bank asks different things!), dig out the numbers they’re after, double-check that every figure ties out across your filings at Companies House, and draft a formal response.

A single typo or inconsistency could result in a loan rejection, so rushing this is not in your interest. Because of that, bespoke references are billed on the time they take, typically falling between £80 and £150 +vat depending on how demanding the bank decides to be.

Our Name on the Line

There is another reason banks insist on these letters: RISK.

When a lender asks us to sign a certificate confirming that your earnings are sustainable, they are effectively trying to shift the underwriting risk onto our shoulders. If things go pear-shaped down the road (i.e. you default on the loan), they want to be able to wave our letter in court.

That is why you cannot shop around for a mortgage certificate. The only accountant who can sign off on your figures is the one who actually prepared them. Phoning up a random firm and saying, “I have done my own numbers, can you just sign this form to keep the bank happy?” is like asking a doctor to write you a prescription when you have never stepped foot in their surgery.

Qualified Accountants Only!

Lenders accept our signatures because we hold a qualification and practising certificate from the ICAEW – the Institute of Chartered Accountants in England and Wales.

This is probably the time to mention that “Accountant” isn’t a protected title – anyone can call themselves an accountant, do your tax return, and file it to HMRC. No qualifications or insurance required.

Which is awkward when someone comes to us, out of the blue, desperate for us to sign off a mortgage certificate, because the bank doesn’t recognise the person they’ve been paying for years to do the work.

Maintaining that professional membership costs over £1,000 every single year, alongside hefty professional indemnity insurance. It is the sole reason our signature carries weight with the banks, so it is only fair that the clients who need those formal letters help shoulder the cost of maintaining the credential.

The Urgency Factor

Almost without fail, mortgage requests arrive with hair on fire: “I have my mortgage interview tomorrow morning and they need this signed today!”

I’ll be honest – this is frustrating for both the accountant and their client. Your broker should be telling you well in advance what’s needed, based on their experience with that lender. If they aren’t on the ball on this, you need to find someone who is.

We always aim to get your paperwork completed by the time you need it, provided we have at least one working day to turn it around. Calling us while you are already sitting in front of your bank manager simply is not fair to our other clients whose work is already scheduled into our diaries. 

Dropping pre-booked work to prioritize an emergency lender’s report request takes extra effort and reshuffling, which is another reason that level of service carries a sensible fee.

Talk to us first!

Whenever a lender or broker hands you a questionnaire, send it over to us before you agree to anything. We are always completely transparent about our fees and will give you a clear price once we see what the bank is asking for.

Even better: get in touch with our team in Taunton before you even start house hunting or speaking to mortgage brokers. A quick heads-up allows us to make sure your latest tax returns, dividends, and accounts are completely up to date, saving you stress, delays, and last-minute panic when you find your dream home. 🐧