If you’re a small business owner, how much operational importance do you place on pension compliance? Do you believe that auto-enrolment is a top priority, or are there more pressing business concerns that take precedence in the everyday running of your company?
Although numerous studies had suggested that auto-enrolment was one of the two biggest priorities for small businesses, new research by NOW: Pensions seems to suggest that small business priorities have shifted over the course of the last 12 months. An earlier survey by R3 found that out of 500 small businesses polled, auto-enrolment was one of the two biggest concerns among small businesses with 11-50 employees.
The NOW: Pensions research which polled 350 small UK businesses, found that only 3 per cent of SMEs with fewer than 50 employees now placed auto-enrolment amongst their biggest operational concerns. In terms of overall priority, the research found that these companies placed auto- enrolment in seventh place, behind sales, access to finance, tech and IT, in the list of their overall business concerns
Why is auto-enrolment compliance so important for small businesses? Well, simply because a failure to comply with the rules could mean many small business owners run the risk of being stung with £500 daily fines for failing to comply with their auto-enrolment pension scheme obligations. In the first quarter of 2016, the Pensions Regulator issued 3,057 compliance notes to small businesses regarding their auto-enrolment obligations. Additionally, pension platform, Paycircle estimates that 63,000 UK SMEs will receive fixed non-compliance penalties amounting to £25m in the next two years alone.
Speaking about the study’s findings, Morten Nilsson, CEO, NOW: Pensions, said that although he understood that business owners faced a variety of difficult issues daily, it was vital nonetheless that they gave auto-enrolment suitable priority as a duty to their business and employees:
“With so many other things to think about it is easy to see how auto-enrolment can slip through the cracks,” he said.
“But, the penalties for non-compliance are steep – as much as £500 a day for firms employing 5 to 49 people – so small firms need to give it the attention it deserves,” he added.
If you are concerned about the new auto-enrolment qualifying scheme or have any other concerns relating to tax planning, business structures, book keeping, business planning and growth, raising finance and VAT registration, then call Steven Glicher accountants on 0161 485 8007 or email firstname.lastname@example.org.