Fined £500 a day!

Fines of up to £500 per day for companies who ignore auto enrolment of pensions for their business.

The fine for employers with between 1 and 4 employees is £50 per day and for those with 5 to 49 employees it is £500 per day.

There is nothing automatic about auto enrolment. You,have to make it happen. If you have just one member of staff you need to know what to do or you will face daily fines, which include weekends.

Auto enrolment is far more than just pensions – 50% is related to employment law.

There are a number of things you need to do, so create an action plan. A small business needs at least 3 months to prepare:-

Staging date you need to find out the staging date for your particular business. Go to www.thepensionsregulator.gov.uk/employers/staging-date.aspx and enter your PAYE reference number. This will give you your staging date.

1. Define your workers

Do you know who are your workers, contractors, employees etc?

Contractors - not on the payroll, invoice as a separate company, use their own equipment and stationery and generally work from their own premises. They would not be eligible to join the scheme

.

Personal Service workers – maybe work regularly for the company and invoice. They will probably need to be included in the scheme.

Employees – those who are on the payroll and have contracts of employment. They need to join the scheme.

2. Update your Employment Contracts

They will need to be updated to take into account auto enrolment. Need to remove any mention of stakeholder pensions. This is also a good opportunity to update other items in your contracts. Though you need to be careful when you do this.