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.
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 firstname.lastname@example.org 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.