By 2018, every business in the UK, even those with only one employee, must have all qualifying staff enrolled in an approved pension scheme unless they’ve specifically opted out.
The pensions regulator has said that it should take businesses 6-12 months to get their schemes up and running but experts suggest that 18 months is a more realistic period to consider. This means that every business in Britain should now have some sort of plan for meeting their deadlines in place, but many are still unaware of the stringent responsibilities they face.
Research published in October showed that 10% of small businesses were missing deadlines, while 25% only just met them. During the period of July-September 2015, 469 compliance notices were served on employers that failed to meet the requirements on time, nearly four times the amount in the previous quarter. 107 companies were issued with £400 fixed penalty notices and two received escalating penalty notices; a daily fine of £50 – £10,000 for each day they failed to meet their responsibilities.
Small businesses at risk
The consequences of non-compliance are extremely serious and could easily put many small firms out of business. It looks likely that as the smallest businesses find deadlines looming, the number failing to comply in time will continue to rise dramatically. Small businesses generally don’t have dedicated payroll or HR departments and are floundering for lack of advice. They are also often struggling to find a provider having left it so late, as smaller firms are less enticing for many pension companies in what is unfortunately very much a providers’ market.
With the pensions regulator having ruled out giving preferential treatment to smaller firms, there is pressure on the government to intervene and extend the auto-enrolment deadline. In December, it was announced that the Work & Pensions Committee was to look into the impact of auto-enrolment on small businesses, but the possibility of an extension shouldn’t be counted on.
Alan Boswell Group has a dedicated team of advisers who can help businesses understand the auto-enrolment process and also offer a free guide to auto-enrolment, staging tools and advice seminars. Whatever the size of your business we can offer a personal, tailored service to help you meet deadlines, avoid fines and access the most suitable pension scheme for your business. If you’re struggling, call us now to find out how we can support you through this process.