Auto enrolment also referred to as Workplace Pensions – a term, which is frequently bandied around – but the price for employers who do not understand their obligations can be high. There’s no “soft landing” and The Pensions Regulator is taking a tough line with policing the regulations especially as the number of employers now falling within the regulations is steadily increasing, along with the fines.
The first step is knowing when auto enrolment applies to your business and that is part of the problem as a recent survey of small business established that a third did not know what their responsibilities were. Working out when you fall into its realms can take longer than you might expect and the best approach is to keep an on-going assessment of the numbers making up your workforce as you run the payroll. Then you need to commence the necessary communications with your employees as missing any or all these milestones can lead to the imposition of penalties. The cost of being non-compliant, as one company recently found out, can be eye-watering – they faced fines totally £42,000 for multiple infringements. HM Revenue and Customs’ argument is that employees should not lose out and hence they want to ensure that employers are fulfilling their statutory obligations.
It’s a far cry from the system in place after the turn of the century, when HMRC offered employers monetary incentives ranging from £75 to £250 to make payroll submissions online before they needed to by law. This was one of their original “soft landing” approaches, but sadly no more …
Employers find themselves faced with a mountain of compliance legislation and for some it’s daunting. They will need advice from finding a suitable pension scheme to guidance on how to communicate with their employees. Our suggestion is that, if you are not sure where to begin or what to do, then speak to a professional rather than run the risk of making a mistake. Although, there will be costs involved it’s probably less than any potential fine. The sad part is that employers may now regard auto enrolment as a barrier to employing further staff. But one thing is for sure and that’s auto enrolment is here to stay. In the fullness of time it will doubtless be regarded as just another responsibility of being an employer.
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