BUDGET 2010: HMRC to consult on income verification service for lenders

Readers' comments (24)

• Andy Fallon | 24 Mar 2010 3:34 pm

  Oh! Did the credit crunch start over here then?
  
  Blimey, I must have been thinking everything started in America

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• Mark Dowling | 24 Mar 2010 3:36 pm

  I don't agree with Mark, sorry. There's no reason why an HMRC income database cannot be accessible directly by lenders. Income data 9 months or so "out of date" is still valuable support in a lending decision, which will be further reinforced by more recent bank statements.
  
  80% of the population don't complete tax returns - their employers' returns of income (sent in far earlier than the following January) would be available.
  
  Taking it further, though, NI is paid monthly to HMRC on the basis of each month's income for employees, so this data would provide ongoing confirmation of recent income without the need to wait for tax returns.

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• How funny!! | 24 Mar 2010 3:39 pm

  ... not to mention that HMRC centres are manned by over-worked staff, with (generally) little concept of having to respond to letters/faxes/emails/etc.
  
  Good luck!!
  
  Oh, but its a great way of potentially swelling the public sector ranks (again) - keeping everyone dependent/employed by the State.
  
  Same OLD Labour!!

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• Anonymous | 24 Mar 2010 3:43 pm

  HMRC will not have up to date figures and that will only lead to more difficulties and potential errors
  Commercial sense is no longer an option
  Lenders will happily lend to an employee with a 10% deposit who can provide the last 3 months payslips,than a self emoloyed sole trader who requries a 50% LTV MORTGAGE but on paper cannot provide sufficient income formally. Whilst prudent measures shoud be taken to reach a lending decision- there is no commercial sense lending as computerised credit scores cant think for themselves!
  RIP mortgages for the self employed

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• Harry Reilly | 24 Mar 2010 3:43 pm

  Utterly ridiculous, there is plenty readily available documentation to prove income (payslips, clients bank statements contracts of employment etc etc). Also I agree with Mark Chilterm HMRC are in a right mess so how efficient are they going to be with up to date income figures?
  
  I agree that the brokers should have an element of accountability but do we not have that already its called "Fraud" Would love to see the FSA practising what they preach when its comes to accountability.
  
  Sounds like time for another colossal waste of money that will achieve very little.

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• Anonymous | 24 Mar 2010 3:50 pm

  Lets's hope that they can manage to deal with it quicker than the applications for student loans, CRB record checks for teachers, school allocation places............ or any of the other things that government turns its hands to that ultimately ends in a disaster. The whole system will grind to a shuddering halt.

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• Simon Webster | 24 Mar 2010 3:51 pm

  This government is determined to introduce red tape, bureaucracy cost and delay at every turn.
  
  If people want to self certify their income even to lie about it and are then unable to repay their loans they lose their homes. It is a commerical risk for lenders and a stupid risk for a borrower.
  
  Let people have the freedom to make up their own minds and then face the consequences of their actions. We do not want or need a nanny state regulating every area of our lives...

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• Anonymous | 24 Mar 2010 3:58 pm

  Brokers are always rather critical when it comes to lenders checking income etc. stating it will take too long or be unmanageable/impracticable.
  
  I have to tell you, if I were lending someone £100,000 odd of my money, I would want to check the borrowers position rigorously including 12 months bank statements to check their spending habits. When was the last time a broker lent their own money - I think they would be a little more cautious if they did!

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• anon | 24 Mar 2010 4:03 pm

  Well obviously you would use in conjunction with the routine and traditional call to the applicant's employer! Think for self-cert and self-employed it makes sense. Also means self-employed cannot have their cake and eat it by fiddling books, tax dodging by declaring a lot less but still able to get a huge mortgage. Think the independent mortgage expert is just worried that without applicants being able to lie about their income he will get less commission as less business coming in.

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• M J Winfield | 24 Mar 2010 4:10 pm

  Regardless as to whether such nonsence is viable,
  there is the question of Data Protection, which ofcourse can be circumvented by forced agreement, (i.e. agree or no mortgage) which in turn leads to Unfair Terms of Contract under the Enterprise Act.
  
  Them there are the implication for joint applications, small business (if a mortgage is beyond reach to small business operatives, then their number will diminish) Employment and many other aspects will suffer.
  
  The Government should leave income determination to the mortgage industry and stop interferring. The old system worked and did not need fixing, Is the new system going to produce better results (however measured) than the old, I doubt it.
  
  Will HMRC involvement result in an increase in the number of civil servants and their benefits including pensions and who will pay the price?

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