Taxman to cross-check mortgage claims
Individuals who use fake income figures on their tax return or mortgage application are being targeted in a historical tie-up between lenders and HM Revenue & Customs.
According to the terms of what it called an “unprecedented opportunity”, HMRC said it would be paid £14 a time to check whether a mortgage applicant’s details match their tax declarations.
Where a lender believes that fake income figures have been presented, or suspects any other type of fraud, typically in order to borrow more money, they will send the applicant’s details to HMRC.
The Revenue will then check the income details given to the lender against information that individual provided in their income tax and employment returns.
“HMRC will then advise lenders whether or not the details correspond, which will inform lending decisions,” the Council of Mortgage Lenders said, welcoming the tie-up.
“As well as aiding mortgage fraud prevention, the scheme will help HMRC to risk assess whether the information it has been given on applicants’ tax affairs is correct. In return, lenders gain access to a source of data that helps them to lend responsibly and manage risk.”
Explaining the need for the Mortgage Verification Scheme, which was first announced in the Budget in March, the council said the cost of mortgage fraud in the UK came in last year at £1billion.