Senior officials from HM Revenue and Customs (HMRC) are set to face a parliamentary grilling this week over a controversial child benefit crackdown that saw thousands of payments suspended based on flawed data.
'Tolerable' Risk of Harm to Families
Internal documents, released under freedom of information laws, reveal that tax authorities believed the risk of causing harm by withdrawing child benefit payments without warning was "tolerable". Officials assessed the chance of inflicting damage as "remote", despite evidence from a pilot scheme showing travel data was incorrect in nearly half of all cases.
This assessment was made even though the department was aware that the Home Office data used to flag potential fraud was incomplete. The documents show officials did not appear to raise significant concerns about the data's reliability, focusing instead on legal processes for sharing it.
A Flawed System and Its Human Cost
The controversy erupted after HMRC suspended almost 24,000 child benefit accounts between July and October. Parents received letters referencing overseas trips—sometimes from up to three years prior—for which the Home Office had no record of a return journey.
By the end of November, the scale of the error was becoming clear. Of those suspended, almost 15,000 families had been confirmed as legitimate claimants, while only 1,019 (4.3%) were found to involve incorrect claims. Thousands of cases remain unresolved.
The human impact was severe and widespread. To streamline the process, checks against PAYE records were removed, leading to parents being suddenly stripped of vital support. Families reported considerable stress and financial hardship as they scrambled to prove they had not emigrated.
One woman had her benefits stopped after travelling to France to collect her husband's remains; the Home Office had no record of her return. Another parent, who travelled from Devon to Dublin for a funeral, was similarly flagged. In a particularly distressing case, a parent was in intensive care with sepsis at the time she was alleged to have emigrated.
Mounting Pressure and Promised Reforms
The Treasury Select Committee, which last year accused HMRC of being "cavalier with people's finances", will question senior officials on Tuesday. The hearing follows an investigation by the Detail and the Guardian in October, which first exposed the systemic flaws.
Mariano delli Santi, legal and policy officer at the Open Rights Group, criticised the department's data protection impact assessment (DPIA), stating it was "obvious that the DPIA was conducted poorly". The DPIA had concluded there was no need to contact parents before suspending payments.
In response to the scandal, HMRC has stated it has introduced new systems. A spokesperson said the department now cross-checks data and gives customers "an opportunity to confirm they are living in the country" before any suspension occurs. The process now allows at least one month for evidence to be provided.
However, for the thousands of families wrongly caught in the initial net, the episode has exposed a system that prioritised anti-fraud efficiency over safeguarding legitimate claimants, with officials deeming the collateral damage an acceptable risk.
