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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?