HMRC child benefit crackdown under investigation after thousands of families wrongly targeted

The UK’s public spending watchdog has launched an investigation into a controversial government anti-fraud scheme that saw thousands of families wrongly stripped of their child benefit payments.

The National Audit Office (NAO) will examine how HM Revenue and Customs (HMRC) designed and implemented a scheme that used flawed Home Office travel records to identify parents suspected of living abroad while still claiming child benefit.

The inquiry follows a series of articles in The Detail and the Guardian which exposed how HMRC relied on faulty travel data - including airline bookings that were never used - to incorrectly suggest that families had emigrated and were fraudulently claiming the support from abroad.

Cases included parents accused of living abroad after taking short holidays, attending funerals overseas, or even failing to board flights due to illness or emergencies.

Among those that hadn’t even flown abroad but were stripped of child benefit by HMRC on the back of flawed Home Office data was a woman who didn’t board plane after her child had an epileptic seizure at the departure gate and another woman who didn’t travel to Portugal as she in intensive care with sepsis.

Some in Northern Ireland had their benefits stripped after returning via Dublin airport while others simply had their child benefit frozen because the Home Office had no record of their return to the UK, an issue that the Home Office or HMRC has never fully explained.

HMRC suspended payments for 23,794 families between July and October in an anti-fraud crackdown. Parents received letters referring to past holidays, sometimes as far back as three years ago, for which the Home Office had no record of return journeys.

However, more than 17,000 of those families were found to be legitimate claimants, as of 31 December, while only 1,019 (4.3%) were claiming incorrectly. The number of legitimate claimants is expected to rise, with thousands of cases still unresolved.

The Audit Office investigation will examine the strategy, governance and implementation of the intervention, and how HMRC managed risks in deploying the data-driven system.

Andrew Snowden MP, the Conservative party’s assistant whip, who last year called for a public inquiry and spoke of his own family’s experience with the benefits system, welcomed the investigation.

“From the outset, there has been a troubling lack of transparency from the Government about how this policy was designed, what data was relied upon, and how thousands of families came to have their payments suspended in error.

“Parliament has had to rely on written questions and piecemeal disclosures to understand the scale of the problem.”

“It is important for public confidence that we find out who knew what, when, and how they will make sure that this kind of mistake doesn’t happen again”, he added.

Working ‘as expected’

Internal documents, obtained by The Detail, show officials considered the data-sharing scheme a success even as thousands of payments were wrongly suspended and most families were later found eligible.

Despite having issued a number of apologies, HMRC officials maintained that the data-sharing arrangement with the Home Office was working as “expected”.

“Although HMRC has acknowledged some issues in the compliance enquiry processes, the data share aspects of the exercise remain consistent with what was expected and agreed”, an internal report sent to the Cabinet Office in mid-November 2025 stated.

The document was obtained through freedom of information requests.

“The exchange of data between HMRC and the Home Office continues to work as expected and agreed, and we still expect that the enquiry process will find around 64% of cases ineligible [for child benefit],” it said.

By the end of November, the opposite was true: at least 63% of cases were found to be legitimate claimants of child benefit, rising to 71% by the end of December.

HMRC has not released any updated figures since then.

The internal report also justified suspending child benefits first before any fraud was proven, a policy HMRC have now abandoned.

The document said that, as well as protecting public funds, suspending payments would have the effect of “prompting customers to contact us to confirm their eligibility".

In a letter to the House of Commons treasury select committee, John-Paul Marks, first permanent secretary and chief executive of HMRC said he had met the NAO’s comptroller and auditor general to discuss a “revised approach”.

The emphasis appears to be focussed on supporting tax payers who are challenged by HMRC with no reference to flaws in home office data, the cause of the mistakes.

“In moving forward with this activity, we are adopting a careful and controlled approach with strong organisational listening so we can support customers through the journey and understand any issues quickly. This includes undertaking assurance on our end-to-end customer process before scaling up volumes.

“An oversight group will closely monitor the progress of the activity utilising international travel data and will iterate processes where our monitoring and learning suggests that we should make further changes.

“I am happy to provide an update to the Committee on progress this summer, informed by the outputs from the NAO’s review,” he said in the letter.

You can contact me in relation to this story at [email protected]