Small Businesses at risk of Pensions Fines
Auto-enrolment is sneaking up on employers very quickly but it’s essential that you and your business is proactive in ensuring that your business provides a suitable pension scheme for it’s employees.
In recent analysis carried out by a payroll software specialist revealed that over 60,000 small business owners could face fines totalling more than £2.5m for failing to meet their auto-enrolment staging date.
The auto-enrolment scheme will see around 2m small businesses face legal obligations to set up appropriate pensions schemes – with an initial fixed notice fine of £400 being applied to firms who fail to meet their new obligations.
The worst is yet to come however. If a firm has received a warning notice and still does not comply, then they could be in line for fines up to £10,000 per day.
Statistics from the government body responsible for auto-enrolment, The Pensions Regulator, estimates that 3.5% of the companies that have already passed their staging date have failed to meet their obligations.
Auto-enrolment is another additional cots for small business owners to consider, as the set up costs for the scheme can be high.
“It’s difficult for small businesses because they don’t have the same administrative capabilities of the larger firms, so it’s more likely that they will either miss the staging date or not provide the correct information to The Pensions Regulator” – Caroline Wood, Director at HR Heroes said
Further investigating by Clyde & Co has also revealed that whistleblowing to The Pensions Regulator is up by around 30% from last year with almost 3000 tip offs.
“Small businesses yet to face their enrolment deadlines are not going to have the support of HR departments to help them deal with the administrative headache of enrolling their employees into a pension scheme,” said Clyde & Co. head of pensions Mark Howard.
Are you confused about auto-enrolment and what your obligations might be? More info