HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association came together in September 2011 to launch the Mortgage Verification Service.
Where a mortgage applicant has been unable to supply adequate evidence of income, the mortgage lender can approach HM Revenue & Customs and ask for verification of the income. HM Revenue & Customs checks the tax returns received and employment data for the mortgage lender, but also risk assesses what it has seen. If the mortgage applicant has said their income is £50,000 on their application, but only declared £20,000 to HM Revenue & Customs, potentially either mortgage fraud is taking place or HM Revenue & Customs has a tax shortfall on £30,000 to pursue.
Since the service went live, the number of referrals made to HM Revenue & Customs has increased sharply:
Great care should therefore be taken when completing the income details of a tax return.