The Commons Treasury Select Committee has highlighted the potential for fraud and error if the taxman was given direct access to millions of accounts.
"This policy is highly dependent on HMRC's [HM Revenue and Customs'] ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past," the MPs said.
"Incorrectly collecting money will result in serious detriment to taxpayers," the report continued.
"The Government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity.
Some of Britain's top civil servants are enjoying an effective pay boost of up to £30,000 a year by having part of their tax bills paid out of public funds, The Daily Telegraph has reported.
The newspaper said Government departments were paying the taxes on perks such as official cars, first class rail travel and rent-free accommodation.
HM Revenue and Customs (HMRC) said the rules have been in place since the 1970s and insisted taxpayers do not lose out.
The report said those benefiting from the system included the Cabinet Secretary, Sir Jeremy Heywood, the head of NHS England, Sir David Nicholson, and the former head of the Serious Fraud Office, Phillippa Williamson.