6 Things You Need To Know About Auto Enrolment
- Once a business has reached its staging date it has 5 months to complete the Declaration of Compliance on the Pension Regulator’s website and at present the majority of fines from the Regulator are because this declaration is not being completed.
- It is necessary when assessing workers for the auto enrolment pension scheme to consider any self employed subcontractors, the same sort of rules that decide employed/self-employed status are should be used as a test and then it is up to the employer’s judgement. The Regulator says there is not a right or wrong answer at the moment, but it is important that there is written evidence that the assessment has been done.
- The Pension Regulator will also be checking and issuing fines if communication between the employer and employee falls short of the minimum requirement of letters at the appropriate time, but they have recently reduced the amount of formal letters required.
- In relation to a 1 director company who employs his wife, but she is paid below the limit to qualify for Auto Enrolment (at present this limit is also the NI starting level) then a pension scheme isn’t required, but the formal assessments would need to be completed and a letter to the wife. The pension scheme would only need to be set up if the wife’s earnings increased, but bear in mind that at the present level the wife would not qualify for state pension rights.
- All staging dates are for the 1st of a month, but this actually falls into the previous month for tax – ie staging date 1/10/2015 means that this falls into the September tax month 6/9 to 5/10 and the assessments would need to be completed in September not October.
- If a staging date is missed there may be a penalty, but the employer would be responsible for both the employees and employers contributions for the periods missed.
If you have any questions in relation to Auto Enrolment please call 01233 630000 and ask for Lee Trice.