Many small employers have a limited understanding of the rules and The Pensions Regulator has issued 8,812 penalties since March 2016 which is an increase of 306% from the year before. Fines of between £50 and £10,000 per day (depending on size of company) have been given for failure to comply with the rules.
With such a rapid increase in fines, you have to wonder why so many small and micro employers are struggling to comply with this legislation.
At Critchleys HR & Payroll we look after a large number of small and micro employers. Whilst talking to our clients about auto enrolment pensions it has become clear that there are a number of myths that have stopped our clients from engaging in auto enrolment. Some of the misunderstandings that we have heard from our clients are:
- I already have a pension scheme so I don’t have to do anything.
- The only person on my payroll is my wife.
- I can’t afford to do this.
- None of my employees want to go into the pension.
- I thought auto enrolment pensions did not apply to my business.
On the surface, all of these appear to be valid and understandable reasons for not engaging in auto enrolment. In reality this is not the case and none of the above reasons can be used to avoid taking part in auto enrolment pensions.
Our clients are lucky because we track their staging date to ensure that they comply with the legislation. Other small businesses that do not have the kind of support that we offer could quite easily find themselves in breach of auto enrolment legislation if they ignore their staging date because of their misunderstanding.
We are offering free auto enrolment seminars. These are open to anyone that would like to understand their employer duties with regards to auto enrolment. Our seminars have helped numerous small businesses ensure their compliance whether they use Critchleys HR and Payroll LLP’s payroll services or not.
Find out more about Sean Lovett