This issue, Jack Posner (principal) and Darren Stone (manager) of Leon and Company Chartered Accountants in Leeds write about Automatic Enrolment and how it is affecting businesses and employers.
No doubt, those readers who own businesses will by now have heard of the new legislation obligating UK employers to set up a pension scheme for employees and pay contributions on behalf of most of them. Known as Auto Enrolment (AE), this legislation is already in force and may affect you.
As accountants, why are we concerned? Well, apart from the tax advantages that a pension can bring, the AE process is administrated via the employer’s payroll, which is often run by the accountant. So you could say that accountants are, in fact, on the front-line of Automatic Enrolment.
Before we all get in a panic, let’s first rule out those that this won’t affect. So for business owners who do not employ staff, this won’t affect you. But what about those business owners who may not have staff, but are themselves directors of their own company and receive a regular payslip? Well, generally speaking, you will not have AE duties to comply with, however, there are exceptions to this and confirmation from a professional should still be sought.
For those business owners with staff, then depending upon the size of your workforce, employers have to implement their pension scheme between now and 2018 on set dates; this is known as your “staging date”. The Pensions Regulator should have already written to you confirming this, and also request that you nominate a primary contact at your business.
You need to start planning well ahead of your staging date to ensure you will comply. The kind of action you will need to be taking is:
• nominating a primary contact.
• looking at pension providers and liaising with a professional to select a qualifying pension scheme
• Talking to your accountant to find out if their payroll bureau is ready for AE
Auto enrolment can be onerous, but if approached positively it can be used to improve your appeal as an employer to your current and future employees.