Autumn Winter 2016

14-15 / 36

14
AUTUMN/WINTER 2016 AUTUMN/WINTER 2016
15
Auto enrolment – your duties as
an employer
In October 2012 the Government introduced a requirement
for all employers to enrol their employees into a qualifying
pension scheme.
That staging date has now arrived for most small to
medium sized businesses meaning the complexities of
pension regulations can no longer be ignored.
What do I need to do as an employer?
There are a number of obligations that as an employer you
are required to fulfil, including:
• Choosing a pension scheme provider and a compliant
pension scheme.
• Assessing all employees for their auto enrolment eligibility
based upon their age and earnings.
• Providing communications to your employees,
including letters about the pension scheme and letters
to opt in and out.
• Setting up an employee portal with your chosen pension
provider to upload all employee details as well as employee
and employer contributions after each payroll run.
• Monitoring employee and employer contributions
according to legislation.
• Informing The Pensions Regulator that a compliant
scheme is in place and ensuring that you retain all
records for six years.
The minimum contributions that you must pay into your
employees’ pension scheme are shown in the table below:
Date Employer minimum
contribution
Total minimum
contribution
Contribution levels
up to Sept 2017
1% 2% (including 1%
staff contribution)
Contribution levels
between Sept 2017
and Sept 2018
2% 5% (including 3%
staff contribution)
Contribution levels
after Sept 2018
3% 8% (including 5%
staff contribution)
Our experts are on hand to help you choose a compliant
pension scheme. We will also register and administer the
scheme for you, and advise and answer your employees’
questions about the scheme on your behalf.
Exemption
A number of companies may well be exempt from auto
enrolment.
Auto enrolment duties do not apply when a company or
individual is not considered an employer. For example, if you
are a Construction Industry Scheme (CIS) contractor, you may
no longer employ any staff, you have ceased trading, or you
are the director of a company with no other employees.
However, even if you are satisfied that your company meets
the exemption provisions, The Pensions Regulator still does
need to be advised.
In fact, up until June 2016 we have successfully applied to
The Pensions Regulator for an exemption to the workplace
pension regulations for 9% of our clients that have staged.
For any further guidance on exemption or to establish if you
are eligible to apply for exemption contact a member of our
team on 01228 711888.
National Minimum Wage
With effect from 1 October 2016 the National Minimum
Wage rates will increase. This is a legal right which covers
workers above compulsory school leaving age.
The new hourly rates are as follows:
• employees aged between 21–24 will increase
from £6.70 to £6.95
• employees aged between 18–20 will increase
from £5.30 to £5.55
• employees aged between 16–17 will increase
from £3.87 to £4.00
• apprentices up to the age of 19 or in their first year
of apprenticeship will increase from £3.30 to £3.40
(unless rate specified in apprentice training contract).
Employees aged 25 and above are to be paid the mandatory
National Living Wage set at £7.20 per hour.
Have you claimed your Employment Allowance yet?
This is a Government initiative that reduces your Employer’s
National Insurance Contributions by up to £3,000 per year.
If you haven’t claimed your Employment Allowance yet, you
can still do this now as long as your business or charity has
employer Class 1 National Insurance liabilities and is eligible
to make a claim.
The Employment Allowance is administered through your
payroll and will reduce your monthly or quarterly PAYE
liability payment to HM Revenue & Customs.
Call Vicki on 01228 711888 to find out
more about how auto enrolment a ects
your business.
Vicki Benson
Employer Services Senior
For all things payroll and pensions we’re
here to help. We keep up to date with
all the legislative changes so you don’t
have to. You can trust us to keep you
compliant. Give us a call on 01228
711888 to see how we can help you.
Round up of other news Stats so far…
Up until June 2016 over 90% of our clients
who have reached their staging date have
chosen the David Allen Employer Services
team to help set up and administer their
pension scheme.
For the remaining 10%, in most cases, the client
already had an existing pension scheme in place,
so no further action was required.