10 Mar Auto-Enrolment Challenges for Small Businesses
Many small businesses could be sleep walking their way to having difficulties finding a pension scheme for the employees by simply leaving it too late to find a suitable provider:-
KPMG has warned that small and medium-sized enterprises that fail to plan so as to meet auto enrolment compliance deadlines could struggle to secure a supplier as 2014 is a landmark year for the process.
Around 40,000 SMEs are due to reach their auto enrolment staging date in 2014 according to a series of rolling deadlines. Since all businesses employing between 60 and 500 people will be covered by the new regime by the end of this year, KPMG says there are risks that not all will be able to implement the necessary changes in systems and processes.
Andy Seed, pensions director for KPMG in the South East, said:
‘We’ve already heard anecdotal evidence from a number of suppliers who say that they won’t consider putting themselves forward for business unless an SME has come to them at least three months ahead of their staging date.’
Seed said that some SMEs had failed to appreciate the steps that need to be taken to ensure employees can be auto-enrolled in a pension scheme, which include registration with the regulator and updating payroll systems.
Those companies found to be in breach of statutory requirements face a range of sanctions with the Pensions Regulator, which has warned it will punish persistent and deliberate non-compliance. Financial fines include an initial fixed penalty notice of £400, escalating to additional daily fines in the range of £50 to £10,000 for continued failure to comply with a statutory notice.
‘Failure to do this could leave businesses facing needless substantial financial penalties at a time when the economy is improving, and where any extra investment should be used to secure fresh economic growth.’
If you have a small business and are concerned about what you need to do for auto-enrolment and when, please contact Hughes Accountancy for some advice.