Woeful HMRC’s 90% error rate on north of Ireland child benefit grab

Inept HMRC officials got it wrong nine times out of ten when attempting to heartlessly claw back child benefit payments from north of Ireland claimants. That’s according to a new report from the Detail. They reveal that out of the 826 families the bean counters thought were on the take:

…at least 742 of these were subsequently confirmed to be eligible for Child Benefit. Only 81 were determined to have been incorrectly receiving Child Benefit, while enquiries remain open in three cases.

The Canary previously reported on this scandal last year. Back then we explained HMRC’s cock-up thusly:

The error occurred as a result of new checks in place that compare international travel data with HMRC child benefit claims. If someone is detected as being outside the United Kingdom for a period longer than that which is allowed in order to claim a particular benefit, an investigation will be triggered at the bean counters’ offices.

In the case of those based in the north of Ireland and travelling back home via Dublin Airport, the absence of border checks between the north and south of the island meant there was only a record of them entering a foreign country (the Republic of Ireland), but not one for re-entering ‘UK soil’ when they reached ‘Northern Ireland’. There is a long standing problem of Britain’s ruling class not being able to get their head around the politics of Ireland, but when even HMRC doesn’t understand, it seems we’re entering a new era of cluelessness.

Pilot scheme wrong nearly half the time, but HMRC persisted

Back in January 2026, the Detail revealed that HMRC had determined there was only a “remote” risk of error, which it described as “tolerable”. You’d hope that when potentially depriving vulnerable people of essential funds, the risk would be somewhere between “non-existent” and “zero”. However, the tax authorities proceeded:

…despite evidence from a pilot of the scheme showing travel data was wrong in 46% of cases. Of those investigated for suspected fraud, more than a third were ultimately found to be legitimate claimants.

The Detail also cite how HMRC officials relied on Home Office data, which is “often incomplete, inconsistent, or simply wrong”. We’ve previously reported on Home Office incompetence, saying:

The department fails to train its staff properly, and doesn’t have enough of them, resulting in huge backlogs on applications [on asylum claims].

The HMRC and Home Office have something in common, however – a willingness to ruthlessly pursue arbitrary targets set by the state, ignoring the human cost. This stems from successive Conservative and Labour governments’ determination to go after benefits and migrants, even if that means punishing the innocent, with devastating consequences for those involved.

Corporate sweetheart deals — two tier taxes

There’s a very different standard applied to corporations, of course. When they genuinely fiddle the figures, HMRC will step in with a sweetheart deal. After the US corporation General Electric carried out a $1 billion tax fraud, HMRC settled for receiving just £82 million.

In a separate case, tax authorities allowed multinational companies to:

…settle the use of payroll loan schemes for just 15%

Payroll loan schemes were a tax dodging scheme that allowed people and companies to receive payment for work via a loan, thereby avoiding paying the state. When HMRC closed the loophole and demanded lost taxes back, individuals were asked to pay the lot, but some companies dodged 85%. The pressure from HMRC on ordinary people, some of whom signed up to the scheme with little knowledge of what it entailed, has been linked to ten suicides.

In an interesting use of language, the National Audit Office (NAO) described His Majesty’s Revenue and Customs’ child benefit efforts as “innovative”. That’s a novel way to spell the word ‘clueless’. Maybe the NHS will begin employing similar “innovative” cost saving measures, like performing heart surgery with a plastic knife and fork.

Extraordinarily, the NAO say there was:

…no formal risk assessment of the implications of decisions.

In other words, the thought of ordinary people having their lives turned upside down wasn’t even considered. All the bean counters cared about was clawing back what figuratively amounted to pennies in the grand scheme of the overall tax intake.

The NAO concluded its press release on the matter by saying:

The NAO’s report recommends that HMRC understands its risk appetite for future decisions and ensures that its performance data allow it to monitor customer experience alongside compliance effectiveness. HMRC should also disseminate lessons learned and seek to share these internally and with wider fraud and error teams in government.

Sadly, while Labour continue to embrace a narrative of benefit scroungers, alongside confected panic over asylum seekers, it’s likely government departments will retain a ravenous “risk appetite” when it comes to pursuing the vulnerable

Featured image via the Canary

By Robert Freeman