Late last year, thousands of families were abruptly deprived of their child benefit as the department attempted to implement new rules in a crackdown on benefit fraud. The initiative was designed to identify parents who had left the UK for more than eight weeks and were therefore no longer entitled to child benefit.

However the move incorrectly flagged thousands of families as ineligible. The Treasury's Exchequer Secretary, Dan Tomlinson, has now provided insight into what went wrong with HMRC's system that led to this error, with nearly 17,100 cases now resolved in the claimant's favour.In response to a question from Conservative MP Andrew Snowden, he explained: "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."

He continued: "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." John-Paul Marks, the permanent secretary of HMRC, disclosed to the Treasury Select Committee that 17,048 cases impacted by this error had been resolved in favour of the claimants.

He revealed that 1,109 individuals were found to be non-compliant with the eligibility criteria. Approximately 5,600 cases are still being investigated.

The new fraud detection system was initially launched last August following a pilot scheme. Its purpose was to identify parents who had left the UK for more than eight weeks, thus making them ineligible for child benefit payments.

However, when the system was implemented, one safeguard was removed - a check of Pay As You Earn data. This omission resulted in thousands being incorrectly labelled as "out of the country" and therefore ineligible.

Families in Northern Ireland were particularly affected by another glitch in the system. Residents often depart through a port monitored by the UK Home Office but return via Dublin Airport in the Republic of Ireland.

As a result, their return journey wasn't recorded in the system, leading HMRC to mistakenly believe they hadn't returned.