A significant administrative failure at HM Revenue and Customs (HMRC) has resulted in thousands of families incorrectly losing their vital child benefit payments, an official government review has confirmed.
Scale of the HMRC Compliance Error
The controversy centres on a compliance drive launched to tackle fraud and error within the child benefit system. Between August and October 2025, HMRC initiated checks on 23,794 claimants, suspecting they were no longer entitled to the payments because they had permanently left the United Kingdom. Based on this assumption, their benefits were stopped.
However, the review has exposed a critical flaw in the process. Officials relied primarily on Home Office international travel data, which in many instances did not provide a complete or accurate picture of a person's residency status. Shockingly, it was revealed that PAYE (Pay As You Earn) data checks were not performed on these cases. These real-time employment and earnings checks would have been a far more reliable indicator of whether someone was still living and working in the UK.
The consequence was that numerous individuals who had simply taken short holidays abroad were wrongly flagged as having emigrated, leading to their financial support being abruptly cut off.
Review Findings and Ministerial Response
Following heavy criticism, HMRC conducted an urgent review of the affected cases. The results were disclosed in the House of Commons by Treasury Minister Dan Tomlinson, in response to a parliamentary question from Tory MP Andrew Snowden.
Minister Tomlinson stated that, as of 30 November 2025, 14,994 customers had been confirmed as still eligible for child benefit. Of the remaining cases, only 1,019 were found to have been incorrectly receiving the benefit. A further 7,781 enquiries remain open because the customers have not yet supplied evidence to prove their UK residency.
Tomlinson explained that the errors occurred after an initial pilot scheme, which had successfully used PAYE data, was expanded. HMRC chief executive John-Paul Marks admitted that PAYE checks were removed to 'streamline the process' during this expansion, a decision that proved disastrous.
Political Fallout and HMRC Apology
The blunder triggered stern rebukes from senior MPs. Dame Meg Hillier, chair of the influential Treasury Committee, accused HMRC of being 'cavalier' with people's finances. She acknowledged the need to combat fraud but condemned the "arbitrary decision to remove necessary checks," which created a "costly error" and a "mess" for the department to clean up.
HMRC has issued a formal apology for the distress caused. A government spokesperson said, "We're very sorry to those whose payments have been suspended incorrectly." The department has now amended its procedure, allowing customers a one-month period to respond before any payment suspension occurs.
This incident has cast a harsh spotlight on HMRC's methods as it pursues an ambitious target to save £350 million over five years from child benefit fraud and error, a goal announced in September 2025. The department insists it remains committed to protecting public money and believes most suspensions were accurate, but this episode raises serious questions about the balance between efficiency and due diligence in welfare compliance.
