Tax & Accounting News

Payroll failures highlight need for professionals

08/04/2009

Harris Lipman is highlighting the need for specialist expertise in operating payroll systems in the wake of errors at the Ministry of Defence (MoD) that led to almost £29 million being over or under-paid.

In a report issued in March, the Commons Defence Committee of MPs strongly criticised the system, which brought together army, navy and RAF pay administration with the aim of saving an estimated £100 million a year.

It said there was a “basic and fundamental” error with the system because it placed insufficient emphasis on financial reporting and produced insufficient evidence of payments.

Other flaws included the system holding the wrong personal data for between five and 10 per cent of military staff while “uncertainties” over the level of errors meant that the MoD was now having difficulty recovering money that had been wrongly paid.

The committee added the £245 million Joint Personnel Administration (JPA) programme – supplied by Texan computer giant EDS – had been seen primarily as a human resources project which led to lack of attention being paid to the need for financial reporting.

Vicki Swanton, from Harris Lipman’s payroll team, said: “Although the MoD errors were on a vast scale, the case does highlight the importance of getting your payroll systems right.

“If you don’t have the expertise in-house, it is likely to be more efficient and cost-effective – and will greatly reduce the risk of error – to use an external payroll team, like the one at Harris Lipman, because we are professionals in this specialist area.

“We can take care of all the administration to make sure wages are paid correctly and on time and can tailor our services to any size of business. We can also talk to HM Revenue & Customs on clients’ behalf, if necessary, and we have the expertise necessary to deal with regular changes to complex payroll regulations.”

To find out more about our payroll services, please contact us.

 

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