One of the most important concepts that employers in the UK need to be made aware of is that of auto enrolment. Chances are that you already have a fair idea of what it is. Auto-enrolment necessitates for a majority of the employers in the UK to set in place a workplace pension scheme that accommodates their qualifying workers. Once a qualifying structure has been set up, the employers will need to make contributions to their workers’ pensions on every pay period.
The Cost of Non-Compliance
Regardless of whether an employer is unaware or simply foolhardy, the fact of the matter is that they will be subject to a hefty fine if they do not have auto-enrolment in place. If an employer goes over the staging deadline issued by the Pension Regulators, they might be subjected to a fixed penalty of £400. On top of that, there will be an escalating daily penalty also, which will start from £50 and go up to £10,000. For small businesses, in particular, this is certainly a hefty price to pay.
Who Is Responsible?
When it comes to the setting up of a qualifying workplace pension scheme, it is the responsibility of no one other than the employer. Some employers—especially the ones who have outsourced their accounting departments—are somehow of the perspective that it is their accountants who are responsible for the setting up of the pension scheme and not them. Such employers are, usually, in for a rough wakeup call when they are subjected to the hefty penalties.
Complying with the law of pension auto-enrolment will not only benefit the motivation of your employees but save your business from the repercussions as well. Remember: they are your employees so their pension scheme is your responsibility!
If you would like some help with Auto-Enrolment then please email us; email@example.com