Hadleigh Accountants, Trueman Brown, are a small firms of accountants who believe in keeping their clients up-to date with the latest developments.
The number of companies that have been formed is still very high. One of the next tasks for most companies is to form a PAYE Scheme.
New employers have to be aware that, since 1 October 2017, they are immediately caught by the provisions of the pensions auto-enrolment regime.
TRAP FOR NEW EMPLOYERS
That means that new employers have duties under the auto-enrolment scheme from the moment they employ a worker.
If one of the employees is aged between 22 and state pension age, and they earn more than £10,000 per year; £833 per monthly; or £192 per week, they’re usually “eligible” employees who you must auto-enrol in a workplace pension unless they notify you that they wish to opt out.
As a new employer, you still may have duties under the auto-enrolment regime even if none of the employees meet the criteria to be automatically auto-enrolled.
The employee(s) may have the right to opt in to a workplace pension scheme which means that the employer may have to set one up.
And it is not just new employers who could be caught in the auto-enrolment trap, so can director-only companies.
If the only employee of a an employer is the only director of the company or there is more than one director but only one of the directors has a contract of employment then the employer does not need to auto enrolment.
This exception ends the moment the employer takes on a new employee after 1 October 2017. This employer will be treated like an ‘new employer’ and will immediately be subject to the auto-enrolment regime.
As a new employer the first task is to review your workers to see if they are eligible or have a right to join/opt in to a scheme.
Then the employer must then send new employee a letter setting out their Auto Enrolment rights. We can provide you with standard letters upon request.
Remember The Pension Regulator has the option of fining the employer that is late in complying with its duties. They have already started taking a tough line on non-compliance.
THE NEXT STEP
For non-eligible workers’ rights and a link to TPR, visit http://tipsandadvice-tax.co.uk/download (TX 18.01.02).
If you require any further assistance then please contact us here.