The cost of outsourcing mortgage processing could fall by 17.5% as the Government pledges to review its policy on VAT charged to mortgage processing companies.
The announcement was made in the Government’s response to the Cruickshank report.
Richard Marron, director of loan administration at Global Home Loans, said that mortgage processing companies are currently forced to pass on their VAT costs to lenders wishing to use their service.
Marron said: “This is a deterrent to providers wishing to outsource. The Government has now agreed to look at this issue and it agrees that the tax system should go as far as possible to promote competition in the market.”