Since early 2012 the Pensions Regulator and business commentators have been talking about the new Auto Enrolment pension legislation and raising employer awareness almost on a daily basis.
By the time your Staging date strikes the Regulator will have heard every excuse in the book from employers looking to delay Auto Enrolment. Missing your date and failing to arrange Auto Enrolment for your employees risks not only the Regulator throwing the book at you but also:
- Fines of £500 per day (£10,000 per day for large businesses)
- Pension bill you can’t afford
- Penalties if you encourage employee opt outs
Is it possible to bring the Staging date forward?
Yes. If your Staging date clashes with the company’s busiest time of year and you’re worrying about the extra burden of paperwork for yourself and busy employees it’s worth considering.
To avoid any misunderstandings always keep your communication lines open and in writing between you, the Pensions Regulator and your Pension Scheme provider.
Before changing your Staging date it’s essential you’re planning and preparing well in advance to secure the best time for your business and you must:
- Agree your chosen Pension scheme can fulfil its duties from new Staging date
- Notify the Regulator in writing one calendar month in advance of new Staging date.
Can you ask to postpone the staging date?
Short answer is yes for up to 3 months but you must make it clear to the Pensions Regulator why and give a written Postponement notice to your employees.
How can postponement help you the employer?
As employees come and go the grace period of one month for opting in or out for a broad range of employees is making the payroll process more and more complicated.
Here’s how Postponement can smooth the Auto Enrolment process:
- Aligning Automatic Enrolment with your payroll process
- Avoid manual calculations by aligning with start of your pay period
- Not having to enrol a worker just before they leave your employment
- Short-term workers or seasonal workers with a one-off spike in earnings not enrolled
- Postponement can also be used to avoid refunds of deductions made in a previous tax year
- If part-period calculation is required, an employer may use postponement to avoid this.
Talking to experienced business advisers and tax experts, like ourselves, will help you identify the best time for your company to Auto Enrol.
Discuss with tax and business experts, like us, ways to budgeting for a pension bill, looking at ways of saving tax as an employer and establishing processes that will save you admin time and the burden of compliance.
Call 0141 290 0262 now for a Free Auto Enrolment Assessment to find out how ready your business is for Auto Enrolment.
Look out for my next Auto Enrolment blog ‘What every business owner ought to know about the Auto Enrolment rules of Opting In or Opting Out.’