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Pension auto enrolment – Don’t get stung with a 10k fine



 Dec, 28 - 2016   Business

If you are an employer with one or more people working for you, under the pensions Act 2008, you must put your employer(s) into a pension scheme and contribute towards it.

First of all understand that this is your legal duty, even if you only employ one person, you are still an employer.

If you don’t do it then you could face fines of up to £10,000 and worse still, a prison sentence.

It’s another tricky bit of admin to carry out but fear not, Logic4training are here to give you a helping hand!

 

When should I do it?

Auto enrolment legislation is set to stay in place for the foreseeable. It could become a real problem for small businesses that ignore it or choose to do nothing.

The best thing to do is get it sorted sooner rather than later.

The pensions regulator recommends that you start the auto enrolment process at least a year before your staging date.

Your staging date is the date your automatic enrolment duties come into place and is set in law as of the 1st April 2012.

You need your PAYE number to find out the date or, if you don’t pay your employees through a PAYE Scheme, your staging date will be 1st April 2017.

Auto enrolment comprises five phases:

  1. Assess Workforce
  2. Design the scheme
  3. Communicate with staff
  4. Implement the scheme
  5. Ongoing Record keeping & compliance

 

What happens if I do nothing?

If you still think that you don’t need to pay attention to this because your company is too small or because you think it’s too complicated you are in fact breaking the law.

If you haven’t auto enrolled by the time your staging date arrives you will be immediately fined £400 plus ongoing daily fines of up to £10,000 with a possibility of imprisonment for “Wilful Non-Compliance”.

It is wise that you choose one of the following options and act fast if you haven’t done so already.

 

Do it yourself

If you decide to tackle the auto enrolment process yourself, you will need to read the 561 page “Detailed Auto Enrolment Guidance for Employer” document.

This guidance excludes updates, policy and strategy papers and the multitude of document templates of these guides are difficult to interpret in parts without assistance and it can be easy to make mistakes.

There are also 33 mandatory pension responsibilities, so it can take a long time although doing it yourself does of course eliminate any extra costs.

 

Get someone to do it for you

There are also auto enrolment specialists out there to guide you through the process and help you stay on track.

You need to find a wealth and pension Management Company. They are fully trained on how to help you comply with the new auto enrolment legislation.

This does come with a cost, and some specialists can be pretty pricey, just make sure you shop around and find the right deal for your business.

 

Download Detailed Guidance For Employers