Single mother's benefits cut because HMRC thought she was married to her brother

It is one of several cases where claimants have been wrongly accused of lying about their entitlement to tax credits

HMRC contracts US firm Concentrix to investigate tax credit claims (Getty)

A single mother says her tax credits were stopped because a Government contractor wrongly thought she was in a relationship with her brother.

Lorelle Banks told the Daily Record that HMRC also told her to pay back £1,400 of benefits because of the “ridiculous” error.

She and her five-year-old son live in Motherwell, Scotland, as does her brother Gary Banks when he is on leave from the Army.

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Ms Banks, 24, said she received a letter from Concentrix, who are contracted to carry out tax credits checks, saying her circumstances had changed.

“I called them up when I got the letter and straight away they brought up my brother’s name,” she added.

“They presumed we were married. I told them who he was and that he was in the Army.

“I handed in tenancy agreements and bank statements to prove what I was telling them but the money stopped instantly.”

The Daily Record reported that £400 of withheld tax credits have now been paid to Ms Banks.

Thousands of people on low incomes have been accused of cheating the benefits system by Concentrix, which is part of a multi-billion pound US business services company.

As confused claimants started posting letters online earlier this year, the firm was accused of going on a vast “fishing expedition” for fraud and errors.

Staff working at Concentrix told The Independent they were under pressure to open between 40 and 50 new investigations every day and often did not have time to check whether the allegations they are making stack up.

Many people receiving the company’s letters believed them to be hoaxes because they asked for financial information, including bank statements, to be sent in the post and did not realise they were real until their tax credits stopped.

Another woman said she received a letter asking for proof she was not a lesbian and living with a female partner.

Carmen, a single mother who lives with her three children in Grimsby, had to send documents in her name to prove that she was living alone.

In a statement earlier this year, Concentrix said it could not comment on clients due to confidentiality but added: “Over the last several years we’ve demonstrated significant commitment and growth in the UK and Northern Ireland. We’ve increased our staff by more than 1,000.”

A spokesperson for HMRC told The Independent that the tax authority could not comment on individual cases.

“It's right that we regularly check that people's circumstances have not changed to ensure that we do not overpay tax credits, which would build up a debt that the claimant has to repay and put an unfair cost on the taxpayer," he added.

“When we have reason to believe someone's circumstances may have changed we write to them and allow a full 30 days for a reply. But if we don't hear anything after 30 days, payments are suspended to protect both the claimant and the taxpayer. Payments will be reinstated, where appropriate, as soon as people have provided us with the information requested and it has been reviewed. This is a fair and effective approach, giving people time to respond while ensuring that incorrect payments are adjusted quickly."