Key facts
- An HMRC anti-fraud scheme wrongly cut child benefits for 23,000 families.
- The scheme suspended payments based on flight records, with many parents wrongly flagged as having emigrated.
- An official report by the National Audit Office found HMRC did not adequately consider the policy's impact on claimants.
- HMRC acknowledged mistakes were made and has since strengthened its approach with extra safeguards.
An HM Revenue and Customs (HMRC) anti-fraud scheme that led to 23,000 families having their child benefits wrongly suspended failed to adequately consider the impact on claimants, according to a report by the National Audit Office (NAO). The scheme, which aimed to crack down on fraud by suspending payments to parents believed to have emigrated based on Home Office flight records, was halted after an investigation revealed many individuals were simply on holiday. The NAO found that the initial rollout did not sufficiently consider the consequences for claimants, leading to more eligible individuals having their payments suspended than necessary.
The report highlighted that crucial Pay-As-You-Earn (PAYE) checks, which could have filtered out individuals still residing in the UK, were omitted from the first phase of the scheme. This was attributed to a lack of experienced staff within HMRC, with inexperienced workers handling tax record checks. Parents were reportedly sent letters demanding answers to 70 questions to prove they had not emigrated, despite HMRC holding records of their UK employment and tax payments.
HMRC acknowledged weaknesses in its oversight, including the absence of a single senior responsible owner for the scheme. The tax authority stated that the scheme had protected around £60 million in taxpayers' money and that approximately £270 million was incorrectly claimed in 2024-25 by individuals living overseas. HMRC has since reintroduced PAYE checks and removed specific groups, such as travellers returning via Dublin airport, from the scheme's scope.