Britain’s smallest firms could face fines of up to 22m relating to a lack of understanding about auto-enrolment and workplace pensions duties, a new piece of research has suggested.
With auto-enrolment compliance beginning in 2012 and now moving into a positionwhere employers with less than 30 staff are reaching staging dates, payroll and pensions platform Paycircle has warned that there could be a ‘spike? in the number of penalties being faced.
Auto-enrolment law means that employers of all sizes must enrol staff in a workplace pension scheme and then make contributions of at least one per cent, unless it is proven that employees do not meet the eligibility criteria of being aged between 22 and pension age, earning over 10, 000 and already enrolled in a qualifying pension scheme.
Figures from The Pensions Regulator show that some 459, 000 employers are expected to stage during 2016, with 57 per cent of those classified as micro employers (those having between one and four staff).
The same research from The Pensions Regulator reveals 21 per cent of these size businesses still have a limited understanding? of auto-enrolment duties in the weeks before staging.
Business Advice has partnered with The Pensions Regulator to showcase how three small businesses have gone about getting up to speed and then meeting compliance with auto-enrolment. Longthorne Gunmakers director Elaine Stewart told us, Get someone to do it for you. You receive all the facts and options in a clear way, and whilst the employer ultimately still has the compliance responsibilities, a consultant can take care of the necessary detail. it’s good value for money.
Fines handed out by The Pensions Regulator to businesses not meeting auto-enrolment duties start with a 400 Fixed Penalty Notice. Paycircle has predicted that UK micro employers could be facing as much as 22m in fines over the coming year and a half mainly due to a lack of understanding.
Catherine Pinkney, co-founder of Paycircle, commented: A sizeable chunk of micro employers are still very much in the dark as to what to actually do as their staging date descends on them. Given the no-nonsense approach of the regulator in handing out fines, these businesses need to sit up and take note or risk being slapped with a sizeable penalty.
the concern is that the vast numbers of micro employers still to stage are a hugely diverse and hard-to-reach segment of the business and social care community, ranging from people who employ nannies to those who rely upon personal care assistants. Many don’t even see themselves as employers, which is another problem in itself.
Another one of our auto-enrolment case studies, Dragons? Den success story Magic Whiteboard, advised not letting a staging date creep up on you? as a business owner. Owner Neil Westwood said: My worry is that the smaller firms with only a handful of staff will leave it to the last minute, so don’t ignore it. Start making enquiries early and seek advice when you need it.