A controversial HMRC trial aimed at tackling child benefit fraud has come under scrutiny after it emerged that nearly half of the families flagged as potential fraudsters were wrongly identified.
The scheme, which relied on Home Office travel data, was designed to detect parents who had allegedly left the UK permanently. However, 46% of those accused of leaving the country were still living in Britain, raising serious questions about the reliability of the data and the government’s approach to combating benefit fraud.
According to official figures, the pilot saved HMRC around £17 million but produced an error rate far higher than acceptable scientific standards, which typically range from 1% to 5%. In Northern Ireland, the system’s failures were even more pronounced, with 78% of families incorrectly flagged. Out of 129 families identified as having emigrated, only 28 had actually done so.
Labour MP Kim Johnson has demanded an urgent investigation after several of her constituents in Liverpool had their benefits wrongfully suspended.
Legal experts have also voiced concern over the Home Office data used in the process. Colin Yeo, an immigration barrister at Garden Court Chambers, said: “Relying on Home Office data for punitive purposes is always going to be problematic.” He described the approach as “quite alarming” given that the information “so obviously doesn’t bear the weight that they are placing on it.”
The findings follow an investigation by *The Guardian* and *The Detail*, which revealed that thousands of parents across the UK had child benefits stopped as part of a broader government crackdown.
Among those affected was a mother whose benefits were halted after she booked a flight to Italy that she never boarded because her child suffered an epileptic seizure at the airport. Another family lost payments despite not travelling to a wedding abroad that was later cancelled.
The Liberal Democrats and Green Party have since raised concerns in Parliament. Lib Dem peer Tim Clement-Jones questioned why the government had “not published the business case and data protection impact assessments,” while Green peer Natalie Bennett asked what internal reviews had been undertaken since the issue came to light.
It later emerged that around 23,500 letters suspending child benefit payments had been sent to parents across the UK, including in Liverpool, Brighton, Glasgow, London and Rochdale. HMRC has since confirmed that it will no longer use data from Dublin Airport, given its status within the Common Travel Area, and that future suspensions will require cross-checking with PAYE records.
Many parents said they were left feeling criminalised after receiving suspension letters. Some reported that letters were still arriving days after HMRC had issued an apology.
While a dedicated HMRC team has been set up to handle wrongful suspensions, some families continue to struggle to reach the helpline. Foreign nationals in particular have complained that they are still being asked to submit extensive evidence to prove their residency status.
Angela, one of the affected parents, said: “I have spent the whole day requesting letters from schools, nursery, the GP, while my partner finds bank statements. I was only out of the country for three days, and my partner and child for one week.” She added that she had called HMRC dozens of times without success and described the experience as “quite upsetting”.
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.”
