Are You Planning For The Impact Auto-Enrolment Will Have?
Easter 2018 is fast approaching ...
POSTED BY JONATHAN VOWLES ON 31/10/2017 @ 8:00AM
Did you know that auto-enrolment pensions are going to be more expensive from Easter 2018? As an employer, the percentage that you pay will double; mind you, that is only from 1% to 2% ...
Auto-Enrolment rates are rising next year. Are you ready?
copyright: the pensions regulator
Your employees have a bigger increase from 1% to 3%, although some of this increase will be mitigated by tax relief, which means that actually, your employees will only pay a net amount of 2.4%.
There are two important things to do now; firstly, make sure you have a diary note for April 2018 so that you don't miss the increase! Secondly, and more importantly, review your profitability to allow for the extra costs.
"What will this cost increase
mean for you?"
People tend to be one of the most significant costs in any business and to have that cost increasing might mean that you need to look at your efficiencies and your pricing. You also need to think about the impact of inflation and the potential for wage rises.
It is pretty glib to say, "just put your prices up" and although that might, in some cases, be the answer, I think there is a bigger issue here that every business needs to address.
What is the impact of your competitors on your pricing and what are the specifics of the costs that are in your business? What you charge can also get more complicated, with questions like:
How much should you be charging?
What level of profits will you make?
What level of profits do you want?
What service level are you giving to your customers?
What service level should you be giving?
What are the cost implications of your service levels?
Charging and service levels are things that every business needs to get right, and the key message is to think about this now. You need to be prepared and have implemented any changes before we get to April so that they have started to work before your costs go up!
"Would you like to know more?"
If you would like our help in looking at the detail of your costs and planning for improvements, then get in touch with me on 01234 752 566 or click here to ping me an email. We offer a practical workshop to review this, with a follow-up process so that you get the help and support you need to make a difference.
Until next time ...
More about Jonathan Vowles ...
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, which 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.
More blog posts for you to enjoy ...