Midlands accountants Dains have welcomed news that tax credits will now be paid direct by HM Revenue and Customs.
Payments by employers are being phased out.
The move follows negative publicity surrounding the scheme. Businesses have reported an increased administrative burden due to the complex system, while claimants bemoaned delays in payment.
Elaine Smith said: "While the idea of working tax credits is of course a good one, in practice it seems to have caused headaches for all involved. We therefore welcome the news that businesses can now reduce administration as well as costs by no longer having to pay credits through the payroll.
"Instead of paying credits, employers will now only be required to retain tax credit records for employees. They must also be available to answer HM Revenue and Customs queries if required."
The changes will be take place from now through to next April. New claimants now automatically receive their payment direct; however existing claimants will be switched in gradually between December and February.