The formal launch of a new scheme to combat mortgage fraud starts on the 1st September 2011. 

Lenders will use the scheme on mortgage applications following in-house checks when they suspect mortgage fraud.  Relevant details of applications will be sent to HMRC on cases which the lender has inadequate verification of income.  HMRC will then check income details declared to the lender against details on income and employment tax returns.   HMRC will then advise the lender if the income details correspond.

This will aid mortgage fraud detection but also help HMRC to risk assess the accuracy of the information provided on tax returns.  The Scheme will cost lenders just under £17 a case to cover HMRC costs in carrying out the check.