Local accountants and tax advisers, Trueman Brown, warns employers that, from 6th April 2018, the contribution rates to an auto enrolment scheme change.
By now, most existing employers should be complying with the auto enrolment legislation. 5th April 2018 is the last day that the minimum contribution to auto enrolment schemes is 2% (minimum 1% payable by employers and the remainder by employees).
From 6th April 2018, the minimum contributions payable into the auto enrolment scheme will increase to 5% of qualifying earnings. At least 2% of qualifying earnings should be paid by the employer. The employee will have to pay the shortfall to bring the total to 5% of qualifying earnings.
There will be further increases from 6th April 2019 when the minimum contributions payable into the auto enrolment scheme will increase to 8% of qualifying earnings. Of this, a minimum 3% of qualifying earnings should be paid by the employer with the shortfall payable by the employee.
These changes only apply with regards to employees who were auto enrolled into the scheme. They do not apply to employees who were ineligible to be auto enrolled into the scheme and were asked to be placed into the scheme.
Contributions are based on earnings between £5,876 to £45,000 per year (£490 to £3,750 per month, or £113 to £866 per week), and including certain elements of pay.
Local accountants and tax advisers, Trueman Brown, deliver vital services to small business. If you require any further assistance, then please contact us here.