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Warning - Hmrc Is Now Looking At Mortgage Applications

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The Mortgage Verification Scheme started on September 1st and has not been publicised so that people aren't aware of the new rules and can be caught out if they lie about their income. This then results in a full tax investigation.

Better tell everyone you know and post it on any newspaper articles, forums etc. - we want to stop liar loans do we? :lol:

HM Revenue & Customs launched its "Mortgage Verification Scheme" on 1 September. This follows on from an announcement in the March 2010 Budget - Budget 2010 (see 3.86)

HMRC hasn't publicised the launch of the Scheme through the normal channels - here at TW, we haven't seen any Press Releases issued, or any announcements on its website. In fact the only useful reference to the "Income Verification Scheme" we could find was one paragraph under their 2010 Budget Announcement Tax Gap, Evasion and Fraud.

Interestingly, we could find no reference to it in HMRC's Information Disclosure Guidance Manual either.

But there have been press releases in the financial services industry, which focus on the main aim of the facility, which is to combat potential mortgage fraud. Mortgage lenders will now be able to check with HMRC that mortgage applicants' stated income levels tie in to those reported on tax returns.

Some of those press releases include the following, or similar:

'Colin Barclay, Assistant Director, HMRC Risk and Intelligence Service, said "HMRC are determined to tackle fraud wherever we can. The Mortgage Verification Scheme is an unprecedented opportunity for HMRC and lenders to work together to combat fraud in the mortgage industry."'

The Risk and Intelligence Service is the department that launched the Plumbers' Tax Safe Plan and the current VAT Campaign, and will be starting the campaigns for those who provide private tuition and coaching, and next year e-commerce trading.

HMRC has confirmed that mortgage lenders will be providing that department with the income details included in mortgage applications, and that "this information will naturally feed in to" their risk assessment processes.

Which is presumably why it isn't in their Information Disclosure Guidance Manual. (The facility for HMRC to disclose information to a third party - with the taxpayer's permission - has been around for many years). HMRC isn't disclosing the income information to the lender for verification purposes. Instead, the lender is providing the income information to HMRC for checking.

Whilst mortgage lenders will understandably be concerned to ensure that lending is based on accurate income details, HMRC will of course be keen to investigate any apparent discrepancies between stated income levels for mortgage applications and those reported for tax purposes.

Now why wasn't that publicised?

http://www.taxationweb.co.uk/tax-news/personal-taxes/warning-hmrc-is-looking-at-mortgage-applications.html

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The Mortgage Verification Scheme started on September 1st and has not been publicised so that people aren't aware of the new rules and can be caught out if they lie about their income. This then results in a full tax investigation.

Better tell everyone you know and post it on any newspaper articles, forums etc. - we want to stop liar loans do we? :lol:

I sometimes use salary sacrifice as a legal way of reducing my taxable salary. As an example:

-declare £20K a year to HMRC whilst contractual salary is £40K and employer puts £20K of it into the pension together with their NI savings.

This sort of thing caused me no end of explaining when I applied for a mortgage last year. HSBC wanted proof of income from HMRC paperwork but I kept saying the point of salary sacrifice is that HMRC don't see it and it's entirely legal.

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Better tell everyone you know and post it on any newspaper articles, forums etc. - we want to stop liar loans do we? :lol:

This story did the rounds of the national newspapers about 3 weeks ago!

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8732253/HMRC-to-verify-mortgage-applications.html

http://www.dailymail.co.uk/news/article-2031964/Taxman-check-wages-bid-beat-mortgage-fraudsters.html

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If I post this news on a forum or as a newspaper comment.

I may mention my friend who lied about their income and is now facing a very expensive tax investigation. Their house purchase obviously fell through but they still have to pay the mortgage arrangement fee, survey, legal fees, etc.

It's a costly business now telling lies about your income.

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How can we make HMRC backdate their investigations into Mortgage Fraud?

Who can make them do that?

Why arent they doing that?

Is it because Crime didnt exist before September 1st 2011? Is Crime a new phenomena? Do people who committed Crime before this date get a pass?

The FSA have announced that 45% of all loans, were liar loans. James Crosby was a non exec director, then deputy chairman at the FSA.

He also had a position at the treasury, and under Crosby at HBOS, Liar Loans, mortgage fraud, was endemic.

He was knighted by Brown and retired with a pension worth over ten million pounds.

The BOE, and the MPC knew mass mortgage fraud was taking place. The BBC were reporting it, then quashed it. Politicians were profiting from it, in a secret expenses system.

Its The Establishment, who are the Criminals. The Terrorists. Its the Establishment who need to be arrested and charged. They are far far worse than the 'feral rioters.'

This country makes me physically sick.

Edited by Milton

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There might be people who don't read EVERY paper.

Better spread the warning in case anyone missed it.

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I think the MVS is a good idea becuase indirectly all these people who have lied over their income have helped create the problem this country faces along with lenders who didnt do their credit checks properly.

They don't care about you or your ability to buy a house it is just another way of extracting money from the average man or woman - it is another tax take that the elite will escape not sure you can ever welcome government intrusion to this degree in peoples financial affairs for whatever reason.

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I never understood why something like this should be publicised. It is a bit like telling people where speed traps are. If people know, then they know where they can break the law.

Better to keep the traps hidden, and keep people honest. And come down hard when you catch someone.

If this plan works, it will of course not go down well with another part of the treasury that is doing its hardest to keep asset prices high. Take out the liar loans, and you have a bit of a gap to fill.

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They don't care about you or your ability to buy a house it is just another way of extracting money from the average man or woman - it is another tax take that the elite will escape not sure you can ever welcome government intrusion to this degree in peoples financial affairs for whatever reason.

I doubt very much that I will be competing with an "elite" to buy a house. However as liar loans have undoubtedly pushed up house prices I am all for this intrusion. It's a pity it's come so late but better late than never.

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Why now after all these years, it must have been pretty obvious to the government that some people were lying about their true income on mortgage applications to obtain large multiple income loans ...this could have been nipped at the bud years ago..... must have been good reason for all parties why it wasn't. :blink:

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When the cupboards are bare even that old can of chick peas starts to look viable, almost appetising. Seems like the HMRC will leave no stone unturned in their revenue raising drive. Like interestrateripoff said some people might have got some very difficult questions to answer and some huge sums of cash to find.

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I doubt very much that I will be competing with an "elite" to buy a house. However as liar loans have undoubtedly pushed up house prices I am all for this intrusion. It's a pity it's come so late but better late than never.

Ah you will or their children will compete with you, when you are 'rationed' to a strict mutiple that takes no account of your future potential. They will buy with a low mutliple small mortgage or cash. The prices won't change. So a life of renting for you my son and don't forget to doff your cap.

Access to money or credit is a component of social mobility.

The state per se is a bloated and arrogant monster and has no place in private citizens affairs.

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"Mortgage lenders will now be able to check with HMRC that mortgage applicants' stated income levels tie in to those reported on tax returns."

Weren't mortgage lenders just as lax, in fact, encouraging of liar loans? Why would they check?

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Ah you will or their children will compete with you, when you are 'rationed' to a strict mutiple that takes no account of your future potential. They will buy with a low mutliple small mortgage or cash. The prices won't change. So a life of renting for you my son and don't forget to doff your cap.

Access to money or credit is a component of social mobility.

The state per se is a bloated and arrogant monster and has no place in private citizens affairs.

Perhaps I should have said the other reason why I like it is because it won't apply to me? If I buy a house it will be for cash. :lol:

However, you might be right, it could just be a life of renting for me. We have been renting since selling our mortgage free house in 2007 and as times goes on I can see more and more benefits to not owning.

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Perhaps I should have said the other reason why I like it is because it won't apply to me? If I buy a house it will be for cash. :lol:

However, you might be right, it could just be a life of renting for me. We have been renting since selling our mortgage free house in 2007 and as times goes on I can see more and more benefits to not owning.

Ditto :D.

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Why when every time you buy TV receiver of any kind you have to fill n your house address details that anyone taking out a BTL mortgage do not automatically receive a demand from HMRC for a completed tax return. I'm sure HMRC could devise a suitable penalty for non completion of each return. From memory I seem to recall that in 60/70 we were repeatedly advised that any building society/ bank savings interest was taxable and that HMRC received details for all savings institutions for each indiviual account. Must been before savings were taxed at source but with savers far outnumbering BTLers must be easily possible.

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I do find it amusing that when somebody doesn't know something, they assume its a deeply hidden secret, rather than the fact its gone over their head & they've completely missed it.

Will always remember the guy a couple of years ago on here, moaning about not being told his personal tax allowance was going as he earned over £120k a year, despite it being announced in the budget live on national tv !! lol

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I do find it amusing that when somebody doesn't know something, they assume its a deeply hidden secret, rather than the fact its gone over their head & they've completely missed it.

Will always remember the guy a couple of years ago on here, moaning about not being told his personal tax allowance was going as he earned over £120k a year, despite it being announced in the budget live on national tv !! lol

From the article "Now why wasn't that publicised?"

People have mentioned it was in 2 newspapers. Have you seen it on TV?

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....yes, unless they want to remortgage for a better rate or require more cash. :unsure:

That could be the real story here. As I have never had a mortgage are incomes checked/asked for when it comes to a remortgage?

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  • 284 Brexit, House prices and Summer 2020

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      • down 5% +
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