When becoming an employer, you have to comply with certain rules.
Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called ‘autoenrolment’.
All employers have duties, but the duties but the duties you need to carry out will depend on your particular circumstances. You will have to work out if you need to provide a pension scheme or whether you don’t have to provide a pension scheme, but still have other duties.
This handy online tool gives you an outline of what your duties will be www.tpr.gov.uk/onlinetool
Some important dates you need to be aware of are:
Duties start date – The date your first member of staff starts working for you. Your legal duties begin on this date. If you put your staff into a pension scheme on this date, you need to start contributing into it from the next payday after this date.
Declaration of compliance deadline – The date by which you must tell us how you have met your legal duties for automatic enrolment. You must do this by completing an online form known as your declaration of compliance. Â You will be written to, to advise what your deadline is.
This is a legal duty and you must do this by your deadline even if you don’t have any staff to put into a pension scheme. If you don’t do this, you may face enforcement action including fines.
Confirm who should be contacted:
You will be sent a letter, once this is received you should confirm who the employer/owner/most senior person in the company is (‘the employer contact’) as they are responsible for making sure the legal duties are met. This should only take around 5 minutes of your time.
If someone else is helping with your duties (such as an accountant, a financial advisor or a member of staff), you should give us their details, including their email address, as the ‘additional contact’. We will send them guidance and information via emails. If no ‘additional contact’ information is provided, these emails will be sent to the ‘employer contact’ – confirm who to contact by going to www.tpr.gov.uk/elect
Help I need to provide a pension scheme!
You will need to provide a pension scheme and pay contributions into it if anyone who works for you on your duties start date is:
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- Aged between 22 and up to state pension age
- And earns more than £833 per month (£192 per week)
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- Choose a pension scheme
Do this as soon as you can to be ready for your duties start date. - Work out which of your staff need to be put into a pension scheme
Do this on your duties start date - Write to your staff
Do this within six weeks after your duties start date - Declare your compliance
This should be done within 5 months after your duties start date
Choose a Pension Scheme
You should do this as soon as you can to be ready for your duties start date.
You and your staff will pay money into this scheme to help them save for retirement.
You’ll need to have a pension scheme that is set up for automatic enrolment. You should look at different schemes before you decide which is suitable for you and your staff.
You should choose an appropriate scheme that has been independently reviewed or is regulated by the Financial Conduct Authority. There is guidance available online to help make you make the right choice for you and your staff. Go to www.tpr.gov.uk/choose
Work out if any of your staff need to be put into a pension scheme
Do this on your duties start date.
If anyone who works for you on your duties start date is:
- Aged between 22 and up to state pension age
- And earns more than £833 per month (£192 per week)
You are an employer who has to provide a pension scheme.
You’ll need to put your staff into your pension scheme on your duties start date and you will need to start paying contributions into it from the next payday after this date. You need to make sure that at least the minimum contribution is being paid unless you have agreed a different amount with your pension scheme. The total minimum contribution is 8% of your member of staffs earnings.
The employer must pay at least 3% of this, but you can choose to pay more. By law a total minimum amount of contributions must be paid into your chosen pension scheme. You, the employer, must make a minimum contribution towards this amount and your staff member must make up the difference. If you decide to cover the total minimum amount required, your staff member won’t need to pay anything. It is your responsibility to make sure the correct contributions are paid.
There is more information at www.tpr.gov.uk/pension-staff which will help you work out who to put into a pension scheme on your duties start date.
Write to your staff
It is your legal duty to write to all your staff individually to explain how automatic enrolment applies to them.
You must do this within six weeks after your duties start date.
There are letter templates you can use on www.tpr.gov.uk/write-staff
Declare your compliance
You have a deadline to complete this five months after your duties start date.
This is your legal duty to tell us how you’ve met your other duties.
Failure to do this could result in you being fined.
Get ahead, get it done.
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