Do you run a small or medium-sized business?
Do you employ between 90 and 159 members of staff? If you do then as an accountant we think it’s only right to warn you that unless you act swiftly and auto-enrol onto one of the new workplace pension schemes then you could face enforcement action.
The warning comes from the pensions’ regulator, Legal & General, which claims that UK SMEs which fail to register for auto-enrolment pension schemes will face penalties.
The new rules dictate that any SME employing between 90 and 159 members of staff must begin their staging process in May. However, even though May is already upon us, 12,000 firms are yet still to register. The lack of urgency amongst some of the UK’s SMEs and laissez faire attitude to pension provision is worrying executive managing director corporate of Legal & General Assurance Society, Jim Islam, who warned:
“Many businesses we are speaking to have not yet registered a pension provider for auto enrolment despite being only a few weeks away from their staging date. Last month the Department for Work and Pensions made it clear that it expects small businesses to implement value for money, well-governed DC schemes to help employees save for their retirement.”
“It is the responsibility of the employer to have a qualifying scheme in place by their staging date or risk hefty fines,” he added.
So what advice is Legal & General offering SMEs? Well, it advises any employer concerned about missing the deadline for auto enrolment to check two key things:
- Firstly to ensure they have an auto enrolment qualifying scheme which confirms that employer and employee contribution levels meet the standards set for auto enrolment: this is particularly important for those companies who may wish to use existing pension schemes.
- Secondly SMEs should check their pension provider is able to meet the new regulations for auto enrolment pensions, such as the pensions charge cap of 0.75 per cent which will come into law by April 2015.
Having done this Legal & General has issued this additional advice:
“For businesses staging this year, if their current pension provider ticks these boxes they should register for auto enrolment without delay. If not they should switch to a pension provider who is geared up to implement these new standards to avoid any last-minute surprises,” added Mr Islam.
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.