HMRC continues to receive referrals from mortgage lenders under the Mortgage Verification Scheme, where mortgage fraud is suspected. HMRC, the Council of Mortgage Lenders and the Building Societies Association launched the Mortgage Verification Scheme on 1 September 2011.
Since its inception, the number of referrals has increased year on year and broke through the 10,000 barrier in 2016/17:
- 2011/12 - 386 referrals
- 2012/13 - 1819
- 2013/14 - 5969
- 2014/15 - 7763
- 2015/16 - 9257
- 2016/17 - 10806
The growth in the number of referrals arguably reflects the buoyancy of the housing market over recent years but, perhaps, also highlights an increased vigilance by lenders when mortgage applications do not quite hang together against a backdrop of tighter lending criteria.
If the mortgage application information does not match HMRC self-employment or PAYE data, tax enquiries can follow, especially if the mortgage application contains a higher income figure than that declared on the tax return or reported by the applicant’s employer.
My name is Guy Smith. I am a Senior Tax Manager at inTAX representing individuals, partnerships and companies who are in dispute with HMRC, or need to make a disclosure to bring their tax affairs up to date.
I worked for HMRC for 15 years, most latterly as a Tax Inspector, before I joined Abbey Tax as a Senior Tax Consultant in March 2003. I was promoted to Tax Investigations Manager, before being promoted again to Head of Technical Research at the beginning of 2017.
I am also a Consultant Editor and Author for Tolley and I sit on the ICAS Technical Bulletin editorial board.