Data suggests that as many as 7,000 fixed penalty notices (FPNs) have been handed out by HM Revenue & Customs (HMRC) to businesses failing to fulfil their auto-enrolment (AE) duties. But did you know that AE compliance also affects small or start-up businesses with a single employee or more?
In May 2015, auto-enrolment was extended to firms with fewer than 30 employees. AE legislation is complex and confusing, but this effectively means that all businesses, no matter how small, will need to enrol their employees onto a workplace pension scheme before their unique staging date – or else face potential fines for non-compliance.
For a small business that employs just 1 – 4 employees, a typical fine will cost you £50 per day. If your start-up employs between 5 – 49 people, this could extend to up to £500 per day.
The only way to avoid non-compliance is to figure out your firm’s unique staging date and register your pension scheme four months before your staging date.
Your unique staging date can be determined from your PAYE reference number, using The Pensions Regulator (TPR)’s website. This could fall anywhere between now and 2018 – but preparing early is always advised to avoid any unnecessary stress in the run-up to your staging date.
By 2018, all employers will be legally required to enrol eligible jobholders into a qualifying workplace pension scheme – although workers themselves can opt out if they so wish.
TPR recently reported that as many as 60,000 employers had already completed their auto-enrolment duties as of September 2016.
If you are a start-up or small business owner, Wilson Wright can point you in the right direction of a low-cost, qualifying pension scheme. Our team can also offer ongoing specialist tax and business support to you and your start-up, to help you find your feet on the pathway to success.
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