Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Communities and Local Government, if his Department will take steps to check whether recipients of loans from the Home Building Fund pay business taxes in the UK.

The Home Building Fund is administered by the Homes and Communities Agency (HCA). Whilst the HCA does not ask specific questions with regard to business taxes, in line with UK government stated expectations, we require our customers to pay all relevant UK taxes.

The HCA’s commercial activities are subject to regulatory supervision as required by the Money Laundering Regulations 2007. Consequently, the HCA are registered with the financial services regulator, the Financial Conduct Authority (FCA) for supervision of anti-money laundering controls. Tax evasion specifically is a criminal offence and now forms part of the definition of ‘criminal activity’ under the Fourth EU Money Laundering Directive.

The FCA and Anti Money Laundering laws and regulations require the HCA to adopt a risk-based Know Your Customer (KYC) programme, which requires the HCA to make additional enquiries with regard to tax status where our customer identification and verification checks identify possible red flags for tax avoidance/ evasion. For example, where a customer operates through a complex organisation structure, which may also be offshore based.

In these situations, the HCA will obtain independent tax advice (or other independent evidence) where we feel that this is necessary, the output of which may determine whether we can enter into or continue an existing relationship with a customer in the event of any concerns being identified.