Temporary workers could face paying the wrong amount of tax due to HM Revenue & Customs (HMRC) proposals to reform pay-as-you-earn (PAYE) system, according to workforce management solutions provider giant.

Last month, HMRC began consulting accountants, lawyers and businesses on the plans to reform the pay-as-you-earn (PAYE) system which would see HMRC calculate tax and pay workers directly instead of employers paying their own workers, HMRC would collect gross pay from employers, make calculations, and pay workers their net pay. Tax deductions would be retained by HMRC.
 
Matthew Brown, managing director of giant, says: “The PAYE system is prone to errors. The proposal that a centralised computer should be responsible for the entire UK workforce is a chilling prospect when you look at HMRC’s track record in this area.
 
“The PAYE system was designed for a time when people changed jobs far less frequently than they do now. An error by a centralised computer could leave millions of workers unpaid or taxed the wrong amount. Temporary workers, because of the frequency with which they change jobs, could be particularly vulnerable.
 
“Private sector payroll systems, like giant precision’s outsourced payroll solution, are very reliable and have the advantage of being decentralised. An error by a centralised payroll system, such as that which HMRC is proposing, could affect the majority of the UK workforce.
     
 “If HMRC assumed responsibility for payroll, employers and recruiters could experience huge problems with workers because of mistakes beyond their control.”