Are you a small employer concerned about the impending auto-enrolment changes? Are you worried that you may not have the necessary resources to be able to efficiently cope with the new responsibilities that workplace pensions will place upon your business? Then, it would appear you are not alone. The Federation of Small Businesses and accountants have already expressed concern that small businesses will struggle to cope with the demands which auto-enrolment, but now it seems the Public Accounts Committee, a powerful collection of influential senior MPs, shares these concerns.
So what’s the problem? Well, 58,000 businesses have already placed approximately 5.4 million employees into workplace pensions since its introduction in 2012, but the remaining 1.8 million small business employers have yet to enrol their staff into the auto-enrolment system. Over the course of the next two years these employers will have to automatically enrol their employees into a workplace pension scheme, and the Public Accounts Committee believes that compliance may place to heavy a burden on them. In short, it feels many will not have the resources to cope with the regime change.
Since the introduction of auto-enrolment, almost all larger employers have enrolled their staff in workplace pension schemes and the number of workers choosing to opt out of the schemes has been lower than expected. However, the PAC believes the “real test” of the auto=enrolment system has yet to come. Speaking about the impending deadline, Meg Hillier, Public Accounts Committee chairwomen said:
“Auto-enrolment is entering a critical stage which will affect 1.8 million additional employers and their staff.”
“It is vital people can understand, implement and have faith in the system.”
Why is the PAC so concerned? Well, in its full report the Public Accounts Committee stated:
“We are concerned about the potential burden on small employers. Smaller employers have fewer resources to administer automatic enrolment and simplifying the process will be critical to the success of the programme.”
So what is the Committee asking for? Well, the PAC is calling on the Department for Work and Pensions (DWP) to keep a close eye on the success of the scheme and consider new ways of simplifying the online tools to speed up the process for the smallest firms. The Committee is also calling for greater powers for the Pensions Regulator as it claims the Regulator does not presently have access to “real-time information” that would help to ease the strain on small business owners.
The Public Accounts Committee is also asking the Department for Work and Pensions to resolve a number of important questions affecting the value of workplace pensions. It feels not enough information has been offered to employers and employees, and believes there is with a “risk that people will be disappointed with their pension if they continue to pay minimum contribution rates”.
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.