The UK’s public spending watchdog has launched an investigation into a controversial authorities anti-fraud scheme that resulted in 1000’s of households being wrongly stripped of their child profit funds.
The National Audit Office (NAO) will look at how HM Revenue and Customs designed and carried out a scheme that used flawed Home Office journey information to establish mother and father suspected of residing overseas whereas nonetheless claiming child profit.
The inquiry follows a collection of articles in the Detail and the Guardian which uncovered how HMRC relied on defective journey information which recorded outgoing journeys, together with airline bookings that have been by no means used, and incessantly did not file return journeys by holidaymakers and enterprise travellers.
HMRC took the info in good religion from the Home Office and ended up incorrectly suggesting that households had emigrated and have been fraudulently claiming the assist from overseas.
Among those that hadn’t even flown overseas however have been stripped of child profit was a lady who didn’t board the aircraft after her child had an epileptic seizure at the departure gate, and one other lady who did not travel to Norway after the marriage she was planning to attend was cancelled.
Some folks in Northern Ireland had their benefits stripped after returning via Dublin airport, whereas others merely had their child profit frozen as a result of the Home Office had no file of their return to the UK, a problem that neither the Home Office nor HMRC have totally defined.
HMRC suspended funds for 23,794 households between July and October final 12 months in an anti-fraud crackdown. Parents acquired letters referring to previous holidays, generally way back to three years in the past, for which the Home Office had no file of return journeys.
More than 17,000 of these households have been discovered to be authentic claimants, as of 31 December, whereas 1,019 (4.3%) have been claiming incorrectly. The variety of authentic claimants is anticipated to rise, with 1000’s of circumstances nonetheless unresolved.
The NAO investigation will look at the technique, governance and implementation of the intervention, and the way HMRC managed dangers in deploying the data-driven system.
Andrew Snowden, the Conservative occasion’s assistant whip, who final 12 months known as for a public inquiry and spoke of his own family’s experience with the benefits system, welcomed the NAO 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,” the MP stated.
“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.”
Internal paperwork, obtained by the Detail information web site, present officers regarded the data-sharing scheme as successful at the same time as 1000’s of funds have been wrongly suspended and most households have been later discovered to be eligible.
Despite having issued numerous apologies, HMRC officers maintained that the data-sharing association with the Home Office was working as anticipated.
“Although HMRC has acknowledged some issues in the compliance inquiry processes, the data share aspects of the exercise remain consistent with what was expected and agreed,” said an inside report despatched to the Cabinet Office in mid-November 2025.
“The exchange of data between HMRC and the Home Office continues to work as expected and agreed, and we still expect that the inquiry process will find about 64% of cases ineligible [for child benefit],” it stated.
By the tip of November, the other was true, with figures launched by HMRC displaying at least 63% of cases were found to be legitimate claims of child benefit, rising to 71% by the tip of December.
HMRC has not launched any up to date figures since.
The inside report justified suspending child benefits earlier than any fraud was confirmed, a coverage HMRC has now deserted.
In a letter to the Treasury choose committee, John-Paul Marks, the primary everlasting secretary and chief government of HMRC, stated he had met the NAO’s comptroller and auditor normal to debate a “revised approach”.
The emphasis seems to be centered on supporting taxpayers who’re challenged by HMRC with no reference to flaws in Home Office information, the reason for the errors.
“[W]e are adopting a careful and controlled approach with strong organisational listening so we can support customers through the journey and understand any issues quickly,” Marks wrote within the letter. “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.”
He stated he would replace the committee on progress in the summertime, taking into account the findings of the NAO assessment.
