By Claire West

In their submission to the HMRC consultation on Improving the Operation of PAYE, the Freelancer & Contractor Services Association (FCSA) has today cast serious doubts on HMRC’s proposal to centralise all PAYE systems describing it as a major threat to the UK recovery, and likely to increase the cost to the public sector rather than cutting costs.

FCSA members provide accountancy services to over 50,000 professional freelancers in the UK, giving the administrative support that keeps the country’s freelance labour market working competitively.

With the recent debacles at HMRC, FCSA has also cast doubt upon the ability of HMRC to administer such a centralised scheme, as their proposals would mean HMRC handling all PAYE payments and would lead to the potential for huge set up and staff costs, double handling of enquiries, serious data security concerns and take away the flexibility that service providers such as FCSA members can offer to their flexible workforce clients.

FCSA is less concerned about the HMRC real time proposals as these could help eradicate issues by improving employee data management to get the correct tax codes used more quickly and this would support the need to provide flexible workforce solutions to help with economic recovery. However, its success would only be realised if HMRC has sufficient systems and resources to process the huge amounts of additional information.

Commenting, FCSA Chairman Stuart Davis says:

“If HMRC was to carry out these centralised PAYE proposals it could be catastrophic to the UK economy as their track record does not give employers and employees the confidence that there would not be glitches at HMRC that could stop millions of workers being paid correctly and on time. Payroll services are best left to the experts in the private sector who have already invested many years and significant sums to ensure payrolls are run efficiently and accurately.”