Halifax wants to contact Inland Revenue - Help please

mic200202

From what I understand some lenders can refer to this HMRC cross check when they have sufficient doubt over the stated income (as they dont want to pay £14 a pop on every case).

What does this prove? Not much except for the amount of tax you pay and the return made by an employer or self employed.This was a pilot scheme which has been adopted by some lenders.Guess what?When they ran it as a pilot they found they may have had £100million of 'potential fraud'.

However,lets think about this..the HMRC doesnt really have the best track record for getting things right do they? They make regular mistakes over tax credits tax codes etc.This is really a way for the revenue to try and drum up more income as opposed to an accurate proof of an individuals income at a particular time.

terrysmith78

Halifax have come back to me today telling me that the valuation has been insructed. Does that mean that all the underwriting process is over and if valuation comes ok then mortgage should be approved?

property.advert

I think this is a disgrace. Whilst I am sure many see nothing wrong in having the government extend its paws into every aspect of their lives, I am not so easily persuaded that this is a good thing at all.

So how does this operate ? Does the lender ask HMRC whether the potential borrower is declaring an income of £100k and when HMRC sees their declared figure at £80k, they launch an intrusive investigation which, and we have seen cases of this, could destroy the livelihood of the borrower ?

What about people whose salary has significantly increased ? Do mortgage forms for PAYE ask a salary history or just a current salary ? You apply on the basis of a current salary not a historical one, but HMRC does work at least in part on historical data. Over energised revenue inspectors could see an investigation at every turn.

The banks didn't want to build relationships with their customers after the 1970s and decided to rely on ones and zeros from computerised reference agencies but now they want the government to get into bed with them on this ? No, a step too far.

So what happens if you refuse ? no mortgage I presume.

jamesd

terrysmith78 wrote: »

Halifax have come back to me today telling me that the valuation has been insructed. Does that mean that all the underwriting process is over and if valuation comes ok then mortgage should be approved?

Yes but don't ask us, ask Halifax.

Thrugelmir

Murdina wrote: »

This scheme is more for self-employed/co directors who have scope to manipulate what they say (the classic story is that anyone in that position has 3 sets of accounts. The one with the highest profits is for the bank. The one with the lowest is for HMRC. The true ones are in the middle.)

Only people intending to commit fraud operate in such a manner. A single certified set from a Chartered Accountant is what is required.

Thrugelmir

property.advert wrote: »

So how does this operate ? Does the lender ask HMRC whether the potential borrower is declaring an income of £100k and when HMRC sees their declared figure at £80k, they launch an intrusive investigation which, and we have seen cases of this, could destroy the livelihood of the borrower ?

No. The borrower is overstating their income, end of matter. No mortgage.

From the lenders perspective there's no tangible proof that the income exists.