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Automatic Enrolment will hit all small businesses across the UK very soon. By 2018, even if a business has one employee, you will be required to comply with pension legislation part of the new pension reform.  Many small employers are being advised to prepare now and be familiar of their duties, as ignoring Automatic Enrolment will be costly. The penalties for ignoring Automatic Enrolment have been made in available in the latest figures released by The Pensions Regulator.

The figures for the third quarter 1st July to 30th September 2016 shows there has been a huge increase in the number of notices and penalties served to employers for non-compliance with Auto Enrolment.  The statistics of the third quarter are shown below.

  • 15,073 compliance notices have been sent out to businesses, this is a rise of over 344% from the last quarter where just 3,392 were issued.
  • 3,728 fixed penalty fines of £400 have been issued, also an increase of over 332% on last quarter, in which only 861 were sent.
  • 576 escalating penalty notices have also been issued.

An escalating penalty is issued when previous compliance notices are ignored so The Pensions Regulator acts.  These are dependent upon the size of the business and can carry a fine ranging between £50 and £10,000 per day.

A rise in small employers staging in 2017 who are complying with these duties  has shown a dramatic increase in penalty fines sent out by the The Pensions Regulator. The requirements to comply with the legal framework set by Automatic Enrolment have shown to been difficult, with most businesses stating that, illness, being busy with general workload and confusion about the new laws have been the main cause for this.

TPR have said that reasons given by employers such as these, aren’t a ‘reasonable excuse’.

Automatic Enrolment was first introduced in 2012 and The Pensions Regulator made it very clear from the start that it is the law, and business and employers must comply with the new laws.  Since 2012 the number of penalties that have been served out are the following.

  • 741 escalating penalty notices
  • 26,040 compliance notices
  • 6,779 fixed penalty notices.

Ontime are here to help.  We know that complying with laws surrounding Automatic Enrolment can be confusing to some employers.  Therefore, we are including our Automatic Enrolment solutions as part of our payroll services.

Speak to us today on 0113 8267260 to see how we can help your business.

Declare your company exempt from Auto Enrolment

Auto enrolment of pensions is becoming a reality for the UK’s small companies, with the majority of smaller businesses required to be running pension schemes by early 2017, and every employer in the country required to be set-up by early 2018.

Exemption

Large or medium size employers have not way of escaping auto enrolment, it is not part of law and you are breaking the law if you try to avoid your duties, simple. If your company has employees – even one – you are legally required to operate a pension scheme.

But unlike large or medium-sized businesses with hundreds or even thousands of employees, freelancers, micro-businesses and contractors may be exempt from auto enrolment.

If your company consists only of directors you are not legally required to set up a workplace pension scheme. Many  micro-businesses already have private pension schemes which may not meet the criteria set out for auto enrolment, so applying for exemption will make sure your company has hoops to jump through and can continue your pension contributions as before.

However The Pension Regulator will not know that your company is exempt, so you must inform them.

Here’s how to do it
Send an email to customersupport@autoenrol.tpr.gov.uk with the following:

 

1. I confirm that My Limited Company Name is a not an employer for the purposes of automatic enrolment for the following reason – (select one option from the list below):

a) There is only one director and there are no other staff working for the company
b) The only people working for the company are directors and none of them has an employment contract
c) The only people working for the company are directors and only one of them has an employment contract
d) The company has ceased trading (including date ceased)
e) (if there is some other reason why you believe you do not have any automatic enrolment duties, please provide a brief explanation)

2. The letter code for the company is: The letter code is a 10 digit number which can be found on all letters sent from The Pensions Regulator

3. The PAYE scheme(s) reference is: XXX/XXXXXXX

4. The companies house number (where applicable): XXXXX

5. The name, email address, address and telephone number of contact at the company.

If you have any queries please do not hesitate to get in contact.

 

The Pensions Regulator should reply and confirm your exemption.

Plenty of automatic enrolment awareness but employers need to act now

The Pensions Regulator has warned tens of thousands of smaller employers they must prepare for their automatic enrolment duties now.

Latest research published by the regulator demonstrates that while levels of awareness of auto enrolment are high among employers, more than 20 percent of those due to stage between June 2015 and November 2015 had not yet set out plans to meet their responsibilities.

Every employer is given a staging date set in law when their duties start. The regulator recommends employers should start to prepare for auto enrolment 12 months before this date.

The employer survey carried out in November last year displayed that more employers are familiar of their staging date due to letters sent by the regulator informing them of their duties, but some remain ignorant. 8 in 10  medium and small employers have sought advise or will do.

The research also discovered that a near universal level of awareness of auto enrolment among intermediaries while many also understood the main elements of the reforms, a move welcomed by the regulator as more businesses say they will depend on specialists to comply with their duties.

Sadly, accountants and bookkeepers have the least level of knowledge about automatic enrolment.

Executive director for automatic enrolment, Charles Counsellsaid: “While it is encouraging to see that awareness of automatic enrolment is improving, there are still too many employers failing to identify their staging date. As hundreds of thousands of small and micro employers prepare to stage in the next two years, we cannot be complacent”.

 

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