Auto enrolment penalties see sharp increase » SMEInsider

Auto enrolment penalties see sharp increase

Savings for pension collected in jam jar-1744280

Stark new figures from the pensions regulator have revealed a sharp increase in the number of fines dished out to SMEs that fail to address their auto-enrolment obligations. The number of fixed penalty notices given out between July and September reached 3,728 fixed, compared to 861 between April and June. Under TPR rules employers are fined £400 for a breach , increased more than four times on the previous quarter’s amount.

TPR auto-enrolment executive director Charles Counsell said he recognised that employers have unique circumstances and challenges, “But the law is still the law. Employers who are struggling should contact us, we are here to help – do not wait for a fine.

“The vast majority of employers are successfully meeting their auto-enrolment duties and are doing the right thing for their staff. A small minority do leave plans too late but in most cases the nudge of a compliance notice is enough to get them back on track and avoid a fine.”

Pensions minister Richard Harrington added that do far, more than 250,000 employers are helping more than 6.7 million people save into a workplace pension. “The duty is being extended to all UK employers and they must ensure they enrol their staff into a scheme by the deadline for their firm, it’s the law.”

 

‘Staggering’ increase

However, some industry observers expressed their concern over the numbers. Catherine Pinkney, co-founder of the payroll and workplace pension platform, Paycircle, said, “The rise in the number of fixed and escalating penalty notices handed out during the latest quarter is frankly staggering.”

“An increase in the number of fines was always on the cards as the smallest businesses started to stage but these numbers are a real cause for concern.

“Between now and 2018 over a million small businesses are set to stage and, judging by this data, the number of fines is set to skyrocket.

“This latest data from the regulator is proof positive that too many small businesses are still in the dark about their workplace pension duties.

“For a multitude of reasons, not least considerable confusion around whose responsibility the workplace pension is — payroll provider, accountant, bookkeeper, adviser or employers themselves — many firms are burying their heads in the sand.

“Many of the smallest businesses still don’t know who to turn to for help. The irony is that for many, doing it themselves can be the quickest and cheapest option.

“The message is still not getting out to smaller business owners that they can set up a fully compliant workplace pension scheme themselves at no cost, and in some cases in as little as an hour.”