Mortgage lenders in limbo over change to HMRC rules
Mortgage lenders have not put in place an HMRC update allowing self-employed mortgage applicants to use self-verified documents in applications, Phil Robinson has said.
While processing times for mortgage applications had increased with the introduction of the mortgage market review last year, Mr Robinson claimed that the update, announced by HMRC in December, should help advisers and applicants save time.
The director of County Durham-based advisory firm Northeast Mortgage Solutions said: “Currently, tax calculations (formerly SA302) can take up to three weeks to send out, according to HMRC – if you can get through to someone at the HMRC – so this change could potentially ease the processing time.”
However, he added that the problem was finding which lenders were accepting the self-printed tax calculations, taken directly from the HMRC online self-assessment return.
He said: “The implication was that lenders would be ready to deal with the change from January. I have spoken to two lenders, the Halifax and TMW, who are not yet aware of the important change.”
Prior to the change mortgage lenders have required self-employed applicants to self-serve, and provide copies of the tax calculation and the tax year overview, which were verified by HMRC.
The change means that customers can print off this information without reference to HMRC.
A spokesman from HMRC said it made the change to the documentation process in December together with the CML, and that HMRC had informed trade bodies, such as the Chartered Institute of Taxation, of the change on December 19.
Adviser view
Daniel Bailey, mortgage broker at Derbyshire-based Middleton Finance, said: “I have not heard of any lenders accepting self-printed tax calculations, and would be surprised if they would accept them as proof of income, as they are open to manipulation.”
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A spokesman for the Halifax said: “As far as we are concerned the update is still at industry level, and the CML is liaising with HMRC on behalf of the industry.”
A spokeswoman for Nationwide, which owns The Mortgage Works, said: “Nationwide is aware of the improvements HMRC has announced and is reviewing how we can make use of the changes.”
The CML said: “Lenders have now received these new guidelines and will review how to incorporate them into their own practices. Any borrower who would like to know how this may affect them should contact their lender directly for clarification.”
