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.

DIRECTOR-ONLY COMPANIES

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.

WHAT NEXT

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.

NON-COMPLIANCE

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.

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