HMRC is set to resume a controversial anti-fraud scheme that wrongly suspended child benefit payments for thousands of families, despite ongoing concerns about the accuracy of Home Office travel data used in the crackdown. The scheme, which uses travel records to identify potential fraudsters, incorrectly stopped payments for 23,800 families late last year, with 13,800 later found to have been suspended erroneously.
The Home Office failed to record return journeys in many cases, and some individuals were incorrectly recorded as leaving the country even though they did not board booked flights. Affected individuals included a woman whose child fell ill at the departure gate and others who changed travel plans without cancelling outward bookings. Of the cases processed, 40% were deemed ineligible for child benefit, while 500 remain unresolved.
HMRC permanent secretary John-Paul Marks told the Treasury committee on 13 March that the final success rate was 40%. He indicated that case openings would remain low until May to ensure the process is working correctly before ramping up volumes. The scheme was effectively halted after media exposure revealed widespread errors, with no new cases opened between 31 October and 31 December.
Internal documents obtained by the Detail news site show officials considered the data-sharing scheme a success even as thousands of payments were wrongly suspended. The documents predicted a 64% ineligibility rate, despite later data showing only 40%. HMRC admitted it failed to cross-check targets against its own PAYE records and will now do so before contacting claimants, but PAYE checks do not cover self-employed individuals or those on benefits.
Conservative MP Andrew Snowden expressed surprise that the crackdown is resuming while so many questions remain unanswered. He stated that the first iteration had disastrous consequences for many families and that the government has not fully disclosed what went wrong or what lessons were learned.
