Ever wondered how business people can afford large mortgages when their business results are not, on the face of it, able to support the repayments let alone other general living costs. Well now HM Revenue & Customs are starting to ask the same question.
From 1 September 2011, HMRC have joined with mortgage lenders in a new Mortgage Verification Scheme. They say that this is all about combating fraud. HMRC will be able to comment if asked to on the income figures declared on mortgage applications.
People who have self certified their income for mortgages may well find themselves facing HMRC questions such as: "You disclosed your income under Self Assessment as £12,000, but put £52,000 on your mortgage application - why should we not tax you on £52,000?".
Of course, the alternative is for a taxpayer to admit to a fraudulent mortgage application!
Our tip -
"Think carefully about what you disclose to a mortgage provider. Try to cheat the system and it is likely to come at the price of a tax enquiry."
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