Auto-Enrolment update: it’s the turn of small businesses
1 May 2017
As auto-enrolment in pension schemes continues to roll out, the staging date for many small businesses is fast approaching.
Whilst The Pensions Regulator estimates that 374,300 small employers enrolled in 2016, more than double that amount will reach their staging date in 2017, with the figure estimated at around 800,000.
Recent figures from YouGov revealed that over half of small and micro businesses saw auto-enrolment as a burden, whilst around 40% of them described it as ‘unfair’. In contrast, nearly three in four (72%) believed it would not prevent them from continuing with plans for growth.
When it comes to auto-enrolment, employers are responsible for meeting their legal duties regarding pensions, and any business missing its staging date is running the risk of being fined. The Pensions Regulator’s position is one of wanting to educate and enable employers to help them comply, but if they find that an employer has chosen to ignore or refuse their pension duties to their staff, it’s likely that they’ll use the powers available to them to enforce compliance.
If a small business misses their staging date through genuine error or misunderstanding, however, then the Pensions Regulator may simply step in to help and support the employer in fulfilling their duties as soon as possible. It’s worth noting, though, that late compliance will lead to back payments for missed payments so that employees don’t miss out on the pension contributions they’re entitled to. It’s also the employer’s responsibility to let their workers know that they have the option to backdate their own contributions, but they can choose whether or not they want to do this.
With so many small businesses offering pension schemes for the first time through auto-enrolment, 2017 is set to become a key year in the Government’s drive to modernise the way firms of this size manage payroll and accounts. However, the latest figures from the Institute of Chartered Accountants in England and Wales suggest that three quarters of businesses do not yet use accounting software, suggesting that there is still some way to go in achieving widespread digital accounting.
At Old Mill we are Platinum Partners with Xero, ‘the beautiful accounting software’. We believe that Xero can really benefit your business in numerous ways;
- Empower you with greater control of your business at your fingertips
- See your business bank accounts and cash flow situation with real time information
- Control all your documentation from your smartphone/tablet/computer
- A world of software add-ons that can take management information for your business to a new level
- Multi-user access making it easy to collaborate online with your team and your advisers
- Bank level security – ensuring your information is safe and secure
For more details, please contact a member of our team.