Payroll and Auto-Enrolment
We have a dedicated payroll processing team who will provide a confidential payroll service and release you of the weekly/monthly burden to concentrate on your business. We will ensure all filing deadlines are met together with reporting under Real Time Information.
We can also provide assistance and guidance in the following areas:
- Contracts of employment
- All aspects of day-to-day payroll processing - Return filing, notification of PAYE sums, Production of payslips etc.
- Holiday, statutory maternity and paternity entitlements etc.
- Tax efficient benefits such as the cycle to work scheme
- Salary sacrifice (More Information)
- Sickness, injury and absence
- Full compliance with Real Time Information (RTI) software
- Pension Auto-Enrolment
- Completion of Year End payroll tasks
Auto-Enrolment & why you need to act
Between 2015 and 2017, over one million companies will have set up a Workplace Company Pension Scheme that follows the new rules of the Government’s pension reform regulations. The scheme had to be in place by the company’s staging date.
The fines for non-compliance are horrendous:
A fixed penalty of £400 after just four months, plus daily penalties of:
1-4 employees: £50 per day
5-49 employees: £500 per day
After just one month of being late, the daily fines will total £1,500 if you have up to four employees and £15,000 if you have five or more.
Ensuring that the correct scheme is in place requires careful preparation, which can take several months.
DO NOT leave this until the last minute or think ‘it doesn’t affect me’ because anyone with a PAYE reference must comply and there are serious fines, as shown above, for non-compliance.
The good news is that we are here to help.
We have an experienced and fully briefed Payroll Division who can deal with all the related aspects of auto-enrolment, take the burden away from you and ensure you are fully compliant with the new regulations and avoid the risk of these sizeable penalties.
Please see our accompanying guide for further details of all that is involved.
For a no obligation quote on our auto-enrolment services, get in touch today by contacting Simon Rivara or Dawn Evans at this office:
Guide to the Auto-Enrolment laws surrounding work place pensions.
1. Who does this apply to?
An employer will have duties in relation to everyone working for them:
- Who is aged between 16 and 74
- Who works in the UK
- For whom they deduct income tax and national insurance contributions from their wages
2. Staging date
The duties will depend on the ages and earnings of staff on the employers staging date. All employers should know this by now. If you provided your PAYE reference we could find it out for you.
All employers are required to complete their declaration of compliance (registration) with the regulator within five months of their staging date, even if they have no employer duties for their staff (see 4, 5 and 6 below). This can be done on the Pension Regulators website.
3. Nominate a contact
The Pensions Regulator is currently in the process of sending out notices to employers asking them to notify the regulator of who will be responsible for managing the Auto Enrolment process on behalf of the organisation. There is a date specified on the notice by which you must advise the regulator of a contact.
If you wish Cadwallader & Co LLP to be your contact then please forward the notice and we shall make the necessary notification on your behalf. The nominated contacted will receive help and guidance by email or letter from the Pensions Regulator over the coming months.
4. Who has to be automatically enrolled
You must automatically enrol all staff who are:
- Aged 22 to state pension age and
- Working in the UK and
- Earning over £10,000 per annum.
As part of the service we offer, we can identify all staff who need to be enrolled.
5. Who can “Opt in” to a pension scheme
Staff aged between 16 to 74 earning between £5,824 and £10,000 per annum and staff aged 16 – 21 and state pension age to 74, earning over £10,000 per annum, have the right to opt in to a pension scheme and the employer must provide one for them if they ask. Staff must be provided with information about their right to opt in to a scheme but can only ask to opt in after the staging date.
6. Who can ask to “Join” a pension scheme
Staff aged 16 – 74 earning £5,824 a year or less can ask to join a pension scheme and an employer must provide one for them if they ask. Staff must be provided with information about their right to join but can only ask to join after the staging date.
7. What are the contributions payable
The contributions payable to the scheme will gradually increase each year and by 2018 the minimum contributions to the scheme will be:
- 4% of gross pay by each employee
- 3% of gross pay by the employer on behalf of each employee
- 1% of gross by the Government on behalf of each employee
These amounts apply to staff who have to be automatically enrolled (see 4 above) and those who choose to join a scheme (see 5 above).
Employers do not have to make a contribution for staff aged 16 – 74 earning £5,824 a year or less who ask to join the pension scheme (see 6 above).
8. Opting Out
Opting Out is when a staff member decides to leave the pension scheme within a month of being enrolled. Staff who have been automatically enrolled and those who have opted in can choose to opt out.
Employers must not actively encourage staff to opt out; this could be considered an “inducement”. Any decision to opt out must be taken freely by the staff member without influence from the employer.
Once staff have been enrolled into the pension scheme, they have one calendar month during which they can opt out. This is done by staff giving the employer an opt out notice. The opt out notice is provided by the pension scheme.
9. Setting up a Scheme
It is recommended that Independent Financial Advisers are involved. We are asking Andrew Grindley, an Independent Financial Adviser, to provide help and guidance for our clients in setting up a qualifying pension scheme for auto enrolment.
It is also then recommended that an IFA talks to each employee individually to ensure that there can be no come back in the future for enrolling an employee into an inappropriate scheme.
10. Do Existing Schemes Qualify as an Auto Enrolment Scheme?
If you already have a pension scheme set up for your employees, then you will have to ask the scheme administrator if it qualifies as an Auto Enrolment Pension Scheme.
11. Director only Companies
Sole directors with no other employees are exempt from auto-enrolment. However if a sole director takes on an employee then he will have to comply with auto-enrolment legislation for both the director and the employee.
If there are two directors and no employees, the position is not quite so clear and further advice may be needed.
For a no obligation quote on your auto-enrolment, get in touch today