As many as 63, 000 small firm owners could face fines totaling 25m for missing their auto-enrolment staging date, according to new analysis carried out by payroll software company Paycircle.
Around 1.8m small company leaders will face a legal obligation to set up an auto-enrolment scheme for their employees between now and 2018 and face a fixed-notice fine of 400 for failing to do so.
Failing to comply with legislation after a warning notice has been issued can see company owners face further escalating fines of up to 10, 000 per day.
The Paycircle prediction is based on statistics from government body the Pensions Regulator showing that 3.5 per cent of the companies obliged to auto-enrol workers since July 2012 have failed to do so.
Co-founder of Paycircle, Catherine Pinkney, said: Not only will many of the UK’s smallest businesses face significant set-up costs for workplace pensions, but a large number, according to the latest data from the Pensions Regulator, will also receive a fixed penalty fine.
in reality, the percentage of smaller employers that incur a penalty is likely to be higher than the rate to date as smaller companies have less people and time for administration duties. Now is the time for small firms to be proactive about auto-enrolment, or face fines that can rapidly escalate.
The study follows warnings by the regulator that 40 per cent of small employers had? paid up to £1, 000 for advice on auto-enrolment despite the fact that businesses with fewer than four staff can get free support from the government.
Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.
The latest Pensions Regulator Quarterly Compliance and Enforcement bulletin demonstrated a 90 per cent compliance rate amongst small and micro businesses that reached an early auto-enrolment staging date in June last year. more»
Shaz Nawaz, director of AA Accountants outlines what you should know about the scheme being rolled out as it reaches small and micro businesses to make sure you're not vulnerable to large fines resulting from failure to comply. more»