HMRC is currently reassessing the suspension of approximately 23,500 Child Benefit claims following concerns raised by claimants. Child Benefit payments are typically halted if a recipient goes on vacation for more than eight weeks, but some individuals allege that their benefits were wrongly terminated.
In an effort to combat fraud, HMRC implemented a pilot program utilizing travel data to determine if individuals had permanently left the country. Unfortunately, errors occurred, leading to some people being inaccurately flagged as not having returned from overseas trips.
HMRC has issued an apology to those affected by the incorrect suspensions and aims to complete the review by the end of the following week. The tax authority plans to reinstate valid claims and provide retroactive payments where necessary.
Although the pilot scheme reportedly saved HMRC £17 million, reports from The Guardian suggest that 36% of targeted families were unjustly suspected of fraudulent activity. In Northern Ireland, 72% of cases involved erroneous identifications of individuals not returning from trips abroad, with only 28 out of 129 flagged families actually having left the country.
HMRC has updated its procedures to allow individuals a month to respond before their payments are discontinued. An HMRC spokesperson expressed regret for the wrongful suspensions and emphasized the commitment to safeguard taxpayers’ funds, believing that the majority of suspensions are accurate.
Child Benefit, claimed by over seven million families, provides £26.05 per week for the first child and £17.25 per week for each additional child. Eligibility criteria include responsibility for a child under 16 or under 20 if in approved education or training. The child must usually reside with the claimant or have similar financial support arrangements.
High-income earners may be subject to the High Income Child Benefit Charge, where individuals earning over £60,000 must repay a percentage of their Child Benefit. The repayment rate increases with income, reaching 100% for earnings over £80,000. Payment of the charge can be made through self-assessment or via the PAYE tax code.
