Size doesn’t matter
A minority of small employers are failing to act on warnings from the Pensions Regulator.
Automatic enrolment has changed the UK workplace forever, more than six million people have started to save via a workplace pension as a result of automatic enrolment, with more to come between now and February 2018.
As an experienced adviser in this area the first questions I ask are:
As a business owner do you know what’s expected of you?
Do you know what you must have in place for your workers and by when? Auto-enrolment makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. Almost all employers are affected. An important exception is a company with only a single employee who is also a director. The range of employers affected therefore runs
from multinational companies to a family which employs a nanny.
Every employer has a ‘staging date’ – the date that their automatic enrolment duties come into effect. Since January 2016, many firms with fewer than 30 employees have passed their ‘staging date’, increasing the number of employers with auto-enrolment duties by thousands at a time.
For the first time ever, small companies are obliged by law to pay into staff pensions. Consequently, the Pensions Regulator is reporting that it is having to flex its muscles more often to ensure that these responsibilities are met. Every few months it releases its Compliance and Enforcement Quarterly Bulletin, which reports on instances of when it has had to use its powers to enforce the rules. The latest bulletin, covering 1 July to 30 September 2016, shows that the regulator issued 3,728 Fixed Penalty Notices to employers for failing to meet their duties.
Some organisations have contested their fines, claiming that their non-compliance was unintentional and that they had a ‘reasonable excuse’. The circumstances that employers are citing in their defence include confusion between the employer and the payroll administrator as to who is supposed to be doing what; illness; and staff shortages. However, the regulator says in its report that, in the eyes of the law, these reasons are not sufficient to avoid a fine.
There are potential penalties of up to £10,000 a day for employers who fail to implement auto-enrolment. Many companies value the expertise of an adviser or accountant who can look at their particular circumstances and recommend solutions.
For a no obligation discussion please contact Andy Street on 07767 081051
Email firstname.lastname@example.org . www.andrewstreetwm.co.uk