The law on workplace pensions has changed and is now fully in force. Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called automatic enrolment.
Whether you’re a hairdresser, an architect or employ a personal care assistant, if you employ at least one person you are an employer, and you have certain legal duties and obligations.
Firstly, you need to know when is your staging date? This can be done in a few seconds by clicking on this link ‘Check my staging date’.
You also need to understand that there will be an ongoing monthly cost to your business. Many people we speak to just don’t realise that automatic enrolment means that you will be paying into a pension for your own employees.
You must make sure that once you know what you need to do, that it gets done, or there will be penalties for non-compliance.
What you really need to know about non-compliance
The responsibility for complying with the employer duties rests with the employer. If you don’t comply, you’ll face enforcement action in line with The Pensions Regulator risk-based approach. Enforcement action starts with statutory notices and is followed by penalty notices. Further non-compliance can result in court action.
Would I really have to pay a fine for not complying with automatic enrolment?
In a nutshell, if you ignore the warnings (statutory notices), then yes. This is how TPR break it down;
- A fixed penalty notice will be issued if you don’t comply with statutory notices, or if there’s sufficient evidence of a breach of the law. This is fixed at £400 and payable within a specific period.
- An escalating penalty notice for failure to comply with a statutory notice can also be issued. This penalty has a prescribed daily rate of £50 to £10,000, depending on the number of staff you have.
- A civil penalty for cases where you fail to pay contributions due can also be issued. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.
- Where employers fail to comply with a compliance notice or there is evidence of a breach, a prohibited recruitment conduct penalty notice can be issued. This penalty has a prescribed rate of £1,000 to £5,000 depending on the number of staff the employer has.
The TPR aim to fully recover all the penalties that they issue.
What should you do now?
Most of our clients have simply passed over their payroll to us as part of their tailored accountancy package. Our payroll team will tick all of the boxes from start to finish, ensuring that your business is fully compliant every step of the way, including your ongoing monthly responsibilities.
Contact us to find out more about our Payroll and Tailored service, or see our previous link on automatic enrolment.
