HM Revenue and Customs (HMRC) has issued formal apology letters this September to Dame Meg Hillier, Chair of the Treasury Committee, addressing two substantial errors that have impacted thousands of taxpayers across the UK. These correspondence provide detailed updates on the issues and the steps taken to rectify them, as well as plans for repayments where appropriate.
The first letter, sent by John-Paul Marks, HMRC’s First Permanent Secretary and Chief Executive, focuses on errors arising from a child benefit compliance exercise. Earlier in March, it became apparent that HMRC had relied on flawed travel data from the Home Office, which inaccurately suggested that numerous parents travelling abroad for holidays or work had committed fraud. This led to child benefit payments being suspended for around 23,800 families late last year.
Investigations revealed that the Home Office had failed to record many return journeys and had, in some instances, wrongly documented individuals as having left the country despite them not boarding their flights. This was reported by The Guardian in March. Consequently, approximately 13,800 households were incorrectly affected. When Mr Marks disclosed the scheme’s final “success rate” of 40% to the Treasury Committee, it highlighted the significant nature of the error.
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In his latest update, Mr Marks acknowledges the responsibility HMRC holds to use data effectively in protecting public funds and tackling fraud, but emphasises that these actions must be fair, carefully controlled, and include appropriate safeguards for customers. He concurs with the National Audit Office’s (NAO) findings that errors occurred during the initial data use and expresses HMRC’s commitment to implementing all recommended reforms.
The NAO report recognised that, despite flaws, the compliance exercise identified significant instances of non-compliance and helped prevent incorrect child benefit payments. It also pointed out deficiencies in the expanded exercise’s implementation and its adverse impact on some claimants. HMRC responded to early issues within two to four weeks by adjusting processes and reinstated benefits with backdated payments for those confirmed to be eligible.
Following these developments, the exercise has transitioned from a phase of heightened scrutiny back to routine business operations.
The second letter addresses a historic inaccuracy regarding taxable State Pension figures used in tax calculations, including PAYE end-of-year reconciliations, Self Assessment pre-population data, and Simple Assessment calculations. HMRC admitted in July that incorrect pension values had caused discrepancies.
Since that time, progress has been made to prevent recurrence and correct past errors. As of 25 August, HMRC has ensured future reconciliations will use accurate State Pension figures. Corrections to Self Assessment data for the 2025–26 tax year are expected to be completed in September, with rectifications for returns already filed to follow shortly after.
Mr Marks explains that these measures should resolve issues for the current tax year and safeguard future calculations. HMRC will also identify affected individuals from the 2020–21 tax year - the maximum reliable retrospective period based on available data - and correct their tax records without requiring a formal claim.
An estimated 3.2 million taxpayers are anticipated to receive repayments amounting to approximately £19.3 million through PAYE coding adjustments, credits to Self Assessment accounts, or alternative payment methods. Most corrections and repayments are expected to be completed during the 2026–27 financial year.
Customers who believe they were affected in earlier years and possess relevant evidence may request a review, which HMRC will consider individually. Mr Marks concludes by apologising for the impact of the error and noting that an internal audit review will be finalised to ensure lessons are learned and applied.
For further assistance, taxpayers can contact HMRC directly. The Treasury Committee convened this week to discuss these updates in detail.