People were incorrectly stripped of the benefit while HMRC attempted to crackdown on benefit fraud
Thousands of families who suddenly found themselves stripped of their child benefit have been told steps have been taken to stop it happening again. At least 17,000 parents suddenly found their entitlement to the benefit had been stopped.
It later emerged this was as a result of a crackdown which was meant to identify parents who had left the UK for more than eight weeks and were therefore no longer entitled to the state benefit. However mistakes in the system led it to incorrectly flagging thousands of claimants.
The Treasury’s Exchequer Secretary, Dan Tomlinson, has now shed light on the situation explaining what happened in HMRC’s system to result in this error. He wrote in response to a question from Conservative MP Andrew Snowden: “HMRC use international travel data and other checks to help tackle Child Benefit error and fraud, which is expected to save around £350 million over the next five years.
“As HMRC scaled up the work through September and into October 2025, it came to HMRC’s attention in mid-October that the removal of the PAYE check had resulted in some customers being incorrectly included in the compliance campaign. HMRC took swift action to reinstate the PAYE check and apply it retrospectively, including no longer suspending payments at the outset of their enquiries.
“After understanding the issues, HMRC notified Treasury ministers in late October and have kept them fully informed throughout since.” HMRC permanent secretary John-Paul Marks revealed in front of the Treasury Select Committee that 17,048 cases affected by this error had been resolved in favour of the claimants.
A total of 1,109 people were found to be actually non-compliant with the eligibility criteria. A further 5,600 cases are still under investigation.
The new fraud crackdown system was first launched last August after a pilot scheme. It was meant to identify parents who had left the UK for more than eight weeks, making them ineligible for child benefit payments.
However, one safeguard had been removed when the system was rolled out – a check of Pay As You Earn data. This step saw thousands being wrongly labelled as “out of the country” and ineligible.
Families in Northern Ireland were particularly affected by a different flaw in the system as residents often leave through a port monitored by the UK Home Office but return through Dublin Airport in the Republic of Ireland. This led to their homebound journey not being logged in the system and HMRC to believe they hadn’t returned.
