HMRC ‘reviews decision to strip 23,500 claimants of child benefit’

The UK’s tax body is reviewing its decision to strip around 23,500 claimants of child benefit in an anti-fraud crackdown that used travel data to determine whether they had left the country permanently, it is understood.

HM Revenue and Customs has apologised “to those whose payments have been suspended incorrectly” and said immediate action has been taken to update the process after questions were raised about the move.

Under a pilot scheme to tackle fraud and error in the system, the tax authority said in August that £17 million in wrongful payments was saved over 12 months.

But officials have since started working through cases using PAYE data to check how many legitimate claimants have had their benefit stopped after reports that people were incorrectly deemed to have emigrated, it is understood.

HMRC aims to complete its review by the end of next week and, where continued UK employment is found, will reinstate funds and make back payments where necessary.

It comes after Parliament’s Treasury Select Committee wrote to HMRC with more than a dozen questions following reports that the authority had been halting child benefit based on travel data from the Home Office.

Chairwoman Dame Meg Hillier asked how many people had seen their child benefit payments incorrectly withheld and what safeguards were in place to prevent people who did not board booked flights from being incorrectly deemed to have emigrated.

HMRC will respond to the questions posed by the committee in due course, it is understood.

Under existing rules, child benefit payments are usually stopped after eight weeks abroad, unless there are exceptional circumstances.

But the Guardian reported that as many as 46% of families targeted were incorrectly suspected of fraud.

In Northern Ireland, 78% were incorrectly identified as not having returned from trips abroad and 129 families were flagged during the pilot as having left the country when only 28 had actually done so, according to the paper.

In a statement, the tax body said it had updated its processes so that people would be given a month to respond before payments were cut off.

Update

An HMRC spokesperson said: “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.

“We remain committed to protecting taxpayers’ money and are confident that the majority of suspensions are accurate.”