Child benefit: HMRC to review thousands of suspended payments

The UK tax body is reviewing its decisions to withdraw child benefit from around 23,500 claimants after using travel data to conclude they had left the country permanently.

Normally, the benefit runs out after eight weeks living outside the UK, but many affected people complained that HM Revenue & Customs (HMRC) had stopped their money after going on short-term holiday.

The move came after MPs on the Treasury Select Committee demanded answers from the tax authority.

HMRC has apologized for any errors and says anyone who thinks their benefits have been incorrectly suspended should contact them.

In September, the government launched a crackdown on child benefit fraud which it believes could save £350m over five years.

The new system allows HMRC records to be compared with the Home Office’s international travel data, and the tax authority had used this data to suspend payments to thousands of families.

But it is now reviewing all cases following a growing number of complaints from affected people who said they had been on holiday and returned to the UK shortly afterwards.

Eve Craven went on a five-day vacation with her son to New York. She told the BBC’s Money Box program that about 18 months after the trip she received a letter saying child benefit for her son had been stopped.

The letter cited his trip to the United States and said he had no record of his return.

“It basically gave me a month to give them all the information requested to prove I was returning to the UK,” he said.

“It’s just a very big ask for something they got wrong, and they should have been able to fix it themselves.”

Eve’s child benefit has been reinstated and any missing payments have been backdated.

The problem was first identified in Northern Ireland, where some families had left the UK by plane from Belfast, but then returned to Dublin (which is in the EU) before crossing the border home.

Citizens of the United Kingdom and Ireland can travel freely to each other’s countries under the Common Travel Area agreement.

There are no routine passport checks when traveling across the border between Northern Ireland and the Republic of Ireland, meaning the UK government has no data to show anyone may have returned to Northern Ireland.

It is not clear how many errors have been made in total or how.

HMRC told Money Box it would review all previous cases “using PAYE data and, where continued employment is found in the UK, reinstate payments and make any necessary arrears”.

They aim to complete their review by the end of next week.

MPs on the Treasury Select Committee are also now investigating.

Additional reporting by Nick Edser