HM Revenue & Customs (HMRC) is reassessing its withdrawal of child benefit from about 23,500 claimants after an anti-fraud initiative wrongly identified thousands of families as having permanently left the United Kingdom.
HMRC’s experimental programme, created to combat fraudulent claims through analysis of international travel patterns, has come under intense scrutiny after legitimate recipients lost their payments in error.
Officials are now carrying out a full review of affected cases, using employment records to confirm which families still live and work in Britain.
The authority has acknowledged serious flaws in its methodology and issued formal apologies to households whose benefits were wrongly stopped.
This reversal follows mounting evidence that the scheme’s reliance on travel data produced unacceptable error rates across the country.
The pilot programme’s use of Home Office travel information led to alarming results, with nearly half of targeted families wrongly suspected. Northern Ireland saw particularly severe inaccuracies, where 78 per cent were misidentified.
Government data showed that up to 46 per cent of households subjected to benefit suspension had been incorrectly flagged as permanent emigrants.
In Northern Ireland, 129 families were investigated during the trial period, but only 28 had genuinely departed the country.
HMRC error sees 23,500 families wrongly stripped of child benefit
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GETTYThese figures, revealed through media investigations, exposed major weaknesses in HMRC’s fraud detection system.
The scheme was initially said to have prevented £17million in improper payments over 12 months.
HMRC is conducting an urgent case-by-case examination using employment records, aiming to finish within days, and has promised to restore payments and issue backdated compensation to those wrongly affected.
Officials have begun verification checks using PAYE information to identify families with active UK employment, with the review expected to conclude by the end of next week.
Benefit fraud graphic
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GETTY
Where ongoing British employment is confirmed, the authority has pledged full reinstatement of benefits alongside retroactive payments covering the suspension period.
Parliament’s Treasury Select Committee (TSC) has launched an inquiry into the scheme, questioning its safeguards and procedures, while existing rules usually end child benefit after eight weeks of foreign residence.
Committee chairwoman Dame Meg Hillier has submitted more than a dozen questions to HMRC, seeking clarity on the number of families wrongly affected and the protections in place.
Her inquiries include concerns about travellers who bought tickets but never left the country being wrongly classed as emigrants.
HMRC said it will provide full answers to the committee’s questions in the coming weeks.
Current legislation allows benefit cessation after two months overseas, except in exceptional cases, underlining how the scheme departed from normal procedure in its push to detect fraud.
HMRC has apologised and introduced new steps giving families one month to respond before payments are suspended, while insisting most interventions remain justified to protect public funds.
A spokesperson said: “We’re very sorry to those whose payments have been suspended incorrectly.”
The authority has now changed its process, giving households a four-week period to challenge decisions before benefits stop.
“We have taken immediate action to update the process, giving customers one month to respond before payments are suspended,” the spokesman said.
Despite widespread errors, HMRC maintains confidence in the programme’s overall purpose.
“We remain committed to protecting taxpayers’ money and are confident that the majority of suspensions are accurate,” the spokesperson added.