Auto-enrolment is fast approaching for many businesses and it seems quite daunting for most, if not for the pocket, for the processes involved in implementation. However, we strongly advise that employers seek professional advice on how auto-enrolment impacts upon their business as soon as possible. It may not be as daunting as you think.
We have listed some FAQs below which may be of interest:
When is the staging date for auto-enrolment?
More than 250 employees: staging dates between 1 October 2012 and 1 February 2014.
Between 50 and 249 employees: staging dates between 1 April 2014 and 1 April 2015.
Fewer than 50 employees: staging dates between 1 June 2015 and 1 April 2017.
New employers set up between 1 April 2012 and 30 September 2017: staging dates between 1 May 2017 and 1 February 2018.
How much will I have to pay?
|Year||Employer contribution||Total employer and jobholder contribution (including tax relief)|
|First transitional period: from employer’s staging date to 30 September 2017||1%||2%|
|Second transitional period: from 1 October 2017 to 30 September 2018||2%||5%|
|Steady state period: 1 October 2018 onwards||3%||8%|
What will happen if I do not comply?
Initially, you will be educated further about auto-enrolment and encouraged to comply. If this does not work, you may end up receiving a fine. Fines are up to £50,000 (fixed penalty) and up to £10,000 per day.
Can I just dismiss my employees and re-hire them as consultants to avoid auto-enrolment?
No. First, in dismissing your employees, you may face claims for unfair dismissal. Second, you would be making this significant change simply to avoid auto-enrolment which could lead to fines and potentially criminal charges. Third, the hassle that such action would lead to is not worth it. Often learning more about auto-enrolment and the impact it will have on your business will take away or at least minimise your concerns.