- do not want Auto Enrolment
- do not want to pay the ridiculous set up fees which many providers are charging and
- do not want to make contributions to their staffs’ pension pots.
However, in short…. you have NO CHOICE. If you employ even one employee, you must provide them with a pension facility and if they do not opt out, you must make contributions to that pension pot. Whether they are the cleaner, the housekeeper, or the admin assistant, whether they are your son, aunt, mum or best friend…. if they are on your payroll and an employee of your business, you must ensure that you have complied with the red tape and bureaucracy.
A word of warning at this point…. If you make them self-employed or contractors to avoid tax and / or pension obligations, there are significant implications with this as well. In some cases ‘workers’ are also entitled to pension contributions.
They want your hard earned cash
The fines for non-compliance are very heavy and may be up to £500 per day. The number of Escalating Penalty Notices issued by HMRC in Q1 of this year is up almost 4 times on the same period last year as an increasing number of small businesses need to comply and are failing to do so. Actual fines issued rose 6 times between March 2015 and 2016.
Check your dates
Since June 2015 employers with less than 30 employees have gradually been required to join auto enrolment. The actual staging date is based on the PAYE reference number so employers and their accountants must find out when their actual deadline date is as the implementation period stretches across 2 years. There is a quick guide here, but if you haven’t started to prepare for Auto enrolment, I strongly urge you to do so.