Stockport accountants Hallidays are warning that time is running out to get the best Auto Enrolment (AE) deals and firms could also face big fines if they don’t have pensions provision in place by the government deadline.
New research shows that just over half of small businesses are unsure whether they will meet the government deadline to start providing a workplace pension.
Accounting software vendor Geniac spoke to a little more than 500 buisnesses with a turnover under £500,000 and found that half are in danger of incurring significant penalties unless they make provisions for their employees in time.
All SMEs are required to set up a workplace pension for eligible staff by 2018.
Within that, most small businesses – 30 staff or less – must have it in place by April 1 2017.
Businesses without PAYE schemes must then start the auto-enrolment process from April 1.
“Whatever your views on Auto Enrolment , there is one simple truth and that is, it is happening,” says Lyndsey Hayes, a director at Hallidays, a gold Marketing Stockport member.
“This means that as an employer it is a legal requirement and you must set up a pension scheme for your team as part of the government’s workplace pension initiative.
“At Hallidays, we have many years of experience of looking after pensions, payroll and HR.
“We have helped and supported over 70 companies set up their AE compliant pension scheme and continue to ensure they meet their obligations.
“Our current experience is that some of the larger pension companies are reaching their capacity and are shutting their doors to smaller employers.
“Not acting quickly can mean that the only options available to you are the government run schemes which may not suit you or your company, and you may also ultimately end up paying higher fees.
“To avoid fines, you should not underestimate the time and work involved in ensuring your company is AE compliant.
“Once you have your staging date, give yourself plenty of time to prepare and plan and seek expert advice and support.
“The early birds get the best choice of available pensions and the least amount of stress throughout the process.”
Hallidays have produced a guide on Auto Enrolment on their website.
Lyndsey adds: “If you don’t comply, you will face enforcement action from the Pensions Regulator.
“If it is a case of a misunderstanding they will work with you to ensure compliance; however if you have chosen to ignore your duties, they can issue fines and can use civil and criminal enforcement measures.
“For employers currently staging, these are likely to be £2,500 per day and for employers with more than 250 employees, it can be as much as £10,000.”