Small and micro businesses are suffering from what The Federation of Small Businesses, has dubbed ‘stage fright’ – a phenomenon preventing many smaller businesses getting to grips with what they need to do to comply with Workplace Pensions legislation.
Under Workplace Pensions law, introduced in 2012, all UK businesses have been allocated a ‘staging date’ by which they must set up a Workplace Pension scheme, with the ‘stage’ into which they fall being dependent on their PAYE reference number.
Businesses setting up in coming years will have their staging date automatically triggered by their first PAYE registration.
Staging dates for businesses with more than 30 employees have already passed. Dates for businesses with less than 30 employees are set for October 1, November 1, January 1, 2017 and then monthly, on the first of the month, to April 1, 2017.
Staging dates for new employers are from May 1 next year.
Despite fines for businesses with 5-49 employees being £500 per day until compliance with the legislation is proved, there is a low level of understanding among small and micro businesses about what auto-enrolment means for them.
Around 1.8 million small businesses need to set up a scheme between now and 2018 and it is calculated that fines levied on these businesses, for non-compliance, are likely to be in the region of £22m.
Managing director of IFS Employee Benefits at FSB, Paul Baker, says: “It is wrong to think no action is required if you only have one employee, or all your employees are opting out of having a Workplace Pension. Additionally, while you can defer your staging date for three months, you must advise the Pensions Regulator of this. You also need to complete a declaration of compliance.
“Although an accountant, consultant, bookkeeper, or actuary can fill in the declaration on the business’s behalf, the business owner has to check the paperwork is accurate and submitted on time.
“There’s no point shying away and doing nothing. Our advice is to get over your stage fright quickly, understand how the legislation works and take action fast.”