Starting a couple of years ago, a phased introduction of compulsory pension provision by employers for employees is being rolled out. Smaller employers now need to think about it and start taking some actions. The first action is to find out your staging date (see here: http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx).
This is the date by which you need to have something in place – and you need to have told the pensions regulator what you have in place. Once you know this date, you can plan your actions to get something ready.
One very important point is that it is possible for employees to opt out of the scheme (but they would usually be automatically be opted in again after a certain period) and you as an employer must not encourage them to opt out.
What do I need to do now I know my staging date?
Firstly, don’t ignore any letters from the Pensions Regulator – the first one you receive is usually asking you to nominate a contact for them for the business. Usually this is you, as the employer (your accountant may be happy to be a secondary contact).
Next you need to think about planning to get a pension scheme set up (and planning for the cashflow implications of paying employers contributions). On the basis that you’ll have to pay employers’ contributions after your staging date, you may want to consider setting up a pension scheme early and selling the contributions as effectively a pay rise before you’re forced to.
There are a number of schemes out there – each with different characteristics and different levels of administration support. The things you will need to consider are scheme costs, who takes care of the reporting requirements to the Pension Regulator and who takes care of the communications requirements with the employees. These reporting requirements can be quite complicated and so you should understand fully what’s needed and who can do it (you, an accountant, an IFA) reliably so that you keep the paperwork up to date. If you don’t look at these issues in good time, then you can potentially end up choosing or being forced to accept a solution that leaves you with more hassle than you would like.
The pension providers say they are going to be very busy over the next couple of years so they may not deal with things as quickly as we would like.
It may be that your accountant has an arrangement with a particular IFA/pension provider that they can work with – do have a chat with them to see what their plans and suggestions are.
You should also research available schemes (possibly with the help of an IFA).
Do think about auto enrolment in good time. It may be a hassle, but with good planning it’s a manageable process.
TaxAssist Accountants Bedford provide a wide range of accountancy services including tax returns, annual accounts, payroll and bookkeeping. TaxAssist Accountants in Bedford are a part of the largest network of accountants who offer a huge range of experience and expertise to over 55,000 small businesses right across the UK.
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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