HMRC Forced into Review After Incorrectly Halting Child Benefit
HM Revenue & Customs (HMRC) has been compelled to review its decision to suspend child benefit payments from 23,500 people after its use of travel data led to widespread errors. The tax authority had been utilising Home Office international travel data in a pilot scheme designed to identify individuals who had emigrated from the UK, but this resulted in payments being stopped for many families who were merely on holiday.
Flawed System Targets Innocent Families
The child benefit system normally stops payments if a person spends more than eight weeks living outside the UK. However, the new automated system incorrectly flagged thousands of families who had taken brief trips abroad. The issue was first identified in Northern Ireland, where families often fly from Belfast and return via Dublin in the Republic of Ireland, driving home across the border.
According to reports, the scheme's inaccuracy was stark. Almost half (46%) of the families initially flagged as having emigrated were, in fact, still living in the UK. The situation was particularly acute in Northern Ireland, where 78% of those targeted were incorrectly identified as not having returned from their travels. During the pilot, 129 families were flagged as having left the country, but only 28 had actually done so.
Apology and Immediate Action from HMRC
Facing a growing number of complaints and scrutiny from MPs on the Treasury Select Committee, HMRC has taken action. A spokesperson for the department stated: “We’re very sorry to those whose payments have been suspended incorrectly. We have taken immediate action to update the process, giving customers one month to respond before payments are suspended.”
As a direct result of the problems, HMRC confirmed it will no longer use data on travel through Dublin Airport for fraud assessment due to its position within the Common Travel Area. Furthermore, the authority has pledged it will not stop benefits before cross-checking with the individual concerned and examining their PAYE records.
This review comes amidst a government crackdown on child benefit fraud, aimed at saving £350 million over the next five years. While HMRC maintains it is “committed to protecting taxpayers’ money” and is “confident that the majority of suspensions are accurate,” the pilot scheme saved an estimated £17 million but at the cost of wrongly suspecting hundreds of legitimate families.
