Auto Enrolment Workplace Pensions
Boring, but very important ...
Regulation is a fact of life in business. From simple stuff like sending your VAT return online, rather than on paper, to more complicated Health and Safety risk assessments. And now we have Auto Enrolment Workplace Pensions to contend with ...
You may have seen the adverts for the Auto Enrolment Workplace Pensions.
One of the latest bits of legislation businesses need to comply with is Auto Enrolment Workplace Pensions. Do you fancy getting a fine to nudge you to be compliant?
Part of the information the Pension Regulator talks about is sending warnings and fines to 'nudge' businesses to be compliant!
Like a lot of legislation, Auto Enrolment Workplace Pensions has been well publicised by the government, and like a lot of regulations, not everybody understands what they have to do or when to do it by.
The Pensions Regulator has a number of sanctions that they can apply to non-compliant businesses. The most common are a fixed penalty fine and even a daily penalty fine.
"So far there have been some stonkingly large daily penalties!"
Bearing in mind that only about 250,000 businesses have so far reached their auto-enrolment deadline, or staging date, the Autumn 2016 quarterly update from The Pension Regulator makes gruesome reading!
This shows that in just the last three months they have issued 15,073 warning letters and 3,728 fixed penalty notices. Now sending out 3,728 penalties in three months might not seem like a lot, but this is over half of the 6,779 penalties the regulator has ever given ... in just three months.
Oh, and that makes about £1.5m in fixed penalties that have been issued recently! What is going to happen in the next three months, and are you going to be one of the businesses that gets fined?
If you don't understand what you have to do then you need to get yourself up-to-speed quickly:
Every business that has employees needs to comply with the rules, although sometimes complying doesn't involve setting up a pension scheme it normally does. And that means a small amount of cost and hassle. You don't need to involve an IFA or regulated pensions adviser, although you might want to. Probably the best place to start is by asking your accountant or payroll provider. But not every accountant offers this service; we do, so if you want our help then ask us about our low-cost solution.
Know when your deadline is! If you don't know your deadline how do you even start taking control? Importantly you need to start taking action about three months before your deadline. Setting up an Auto Enrolment Workplace Pensions scheme can take a while and don't get caught out because you didn't plan far enough in advance.
Assess your workforce and remember, it is possible for someone who is a worker, but not an employee, to be within the remit of auto-enrolment! This assessment will show you how your employees are categorised and therefore roughly what Auto Enrolment Workplace Pensions will cost you on a monthly basis. For most people, it works out at about the same as 3 or 4 pints of beer per month, so it doesn't have to be expensive.
Do something about it! Being compliant is cheaper than getting fined, so get yourself organised and if you don't have the time to do it all yourself then delegate it.
Finally, and probably most importantly, Auto Enrolment Workplace Pensions mean more costs, so do review your pricing. Is it time to put your prices up?
If you do nothing else after reading this blog post, find out when your 'staging date' is and don't fail because you ignore the rules. And, of course, if you want our help with your Auto Enrolment Workplace Pensions, call us on 0333 335 0422. We'd love to help you.
Until next time ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.