Auto enrolment is on its way, and means that from the “staging date” all employees meeting the criteria must be enrolled in a compliant pension scheme unless they voluntarily “opt out”. The “staging date” is dependent upon a number of factors including the number of employees in the PAYE scheme.
It is already in force for the largest employers. These are the companies with the greatest number of resources available to ensure compliance, and yet we understand that 88 of these companies are already being investigated for non-compliance with the legislation. These companies could be facing penalties of thousands of pounds. You therefore ignore this legislation at your peril.
Whilst the legislation is generally applicable, it does not apply to everyone. Firstly, it does not apply to self-employed individuals or partners unless they have employees themselves. Secondly, it does not apply to someone who is both a director and also the sole employee, ie the “one-man company”. However, under the legislation as it now stands, it would apply to a company where there are two directors (even if they are married or civil partners) or where one partner to a marriage or civil partnership is employed by a company of which the other partner is the sole director.
Other than the above, the only people to whom auto enrollment does not apply are those who:
- Are aged below 22 or above the state retirement age; or
- Who earn below the NIC lower limit
Over the next few months we will be working through all those people for whom we act as payroll agents, and will advise them if and when they will need to apply auto enrolment. Any other client who wants us to look at this for them should send their PAYE reference by e-mail to sara@warringtonaccountants.co.uk. We can then advise clients affected by this legislation, if required, prior to their “staging date” on how they can best comply.