More information passing to HMRC?

From 1 September applicants for mortgages should be aware of the Mortgage Verification Scheme under which their proposed lender may be passing information on to HMRC.  The Scheme is supposedly aimed at preventing mortgage fraud and under it, mortgage lenders will pass details of mortgage applications to HMRC where they do not feel they have adequate information regarding declared income.  This is likely to particularly affect the self-employed or those who own their own businesses.  Such individuals often have wide fluctuations in income and may also be effectively relying on self-certification (if you own your own business, it’s likely that a letter confirming your salary from your employer (you!) won’t be considered adequate by the mortgage lender).

Whilst prevention of fraud is obviously a good thing, it does open up the possibility that HMRC may start an enquiry because the information they have (often a year or more old) doesn’t match the information they receive from the mortgage lender.

As the writer knows, even when there is nothing wrong, an HMRC enquiry can be a costly affair.  There doesn’t seem much that can be done except ensuring that if a mortgage application is made your tax affairs are as up to date as possible.

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