Auto enrolment

Auto enrolment

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My client has asked me to setup and manage the auto enrolment process for his employees.  I'm really not sure how much I should charge for this service.  I already run his payroll anyway, but of course this will mean extra work every month (bonuses are paid so contributions will change from month to month.)  Also, writing to staff to inform them of their rights, preparing any paperwork if they decide to opt out of the scheme etc.

Really not sure how much to charge. 

Please help!!!

Thanks

Replies (14)

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By Willwo01
06th Mar 2015 18:54

Hi, I'm working with accountants on this exact subject if you want to give me a call next week happy to talk through.

Will
07800692413

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Replying to lukeoliver:
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By Summer
07th Mar 2015 15:18

Hi Will

Thanks, I will give you a call, it's always good to get a different perspective on things. 

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By zeofiles
06th Mar 2015 23:32

Two pronged approach
We are working with an IFA on our clients who have staged or are due to stage in the next 12 months.

In a nut shell the IFA works with the client to ensure everything is set up and registered correctly, whereas we are using our software (sage) to undertake the ongoing month processes and reporting to the pension company.

We are charging on a per employee per month basis. In the first few months the set charge doesnt cover costs due to the those opting out often doing so after the first payroll has been run and therefore refunded contributions are common. after this the charge is covering time costs.

The IFA is charging a one off set fee + hourly rate for any further work.

We have chosen to work with an IFA not for referral fees etc, rather to protect our clients from a number of 'shark' IFA's out there who are quite frankly charging extortionate fees for service levels that aren't required.

Our first stager who we run the payroll for was charged £50 per employee as a set up fee (which for 150 employees was a seizable cost. In addition the IFA wanted to charge £5k ongoing consultancy fee even though our payroll takes care of everything!!!

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By richard leighton
10th Mar 2015 12:53

Auto-enrolment

We run about 50 smallish payrolls and most of these will be using NEST as appears most economical for 1-5 employees and are required to take on all employers. We have registered as "agents" on the NEST website and it took about an hour to prepare all the original set up for a one employee client. Once staged in June we will run payroll using Brightpay as that seems to have in it all the necessary letters to employees etc.  (Brightpay was on special offer).

Will continue using moneysoft payroll for our other payrolls until they stage in the next tax year. On this basis looks as though we can charge reasonable fees for the extra work but not extortionate ones that some IFAs are looking at. AND we keep the client !!

 

 

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Replying to Justin Bryant:
blue sheep
By NH
11th Mar 2015 07:52

how much?

richard leighton wrote:

. On this basis looks as though we can charge reasonable fees for the extra work but not extortionate ones that some IFAs are looking at. AND we keep the client !!

yes but what do you call reasonable?

When we were thinking of sticking with Iris we were looking at charging around £3 per employee per month (our cost from Iris was to be 95p), but now we are going with Brightpay which will save us both that 95p, and the extra cost of the software, also charging per employee doesnt really work for all clients.

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By sarahg
11th Mar 2015 08:41

NEST

If you are going to use Nest who is doing all the administration on the pension on an ongoing basis?  Who will assess the staff, send the paperwork to them, etc?

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Replying to MrDSGrace:
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By MissAccounting
11th Mar 2015 08:49

NEST?

sarahg wrote:

If you are going to use Nest who is doing all the administration on the pension on an ongoing basis?  Who will assess the staff, send the paperwork to them, etc?

 

What is the ongoing administration? As you can probably tell I havent looked into this fully (first staged company isnt until 2017) but I thought with NEST etc once they the employer and employees were set up then you just needed to file the monthly report with the pension provider which your software should be able to do?

Obviously there will be starters and leavers and I assume staff who get a payrise or hit a certain age will have to be watched out for but I assymed that was about it?

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Replying to Jo Nokes:
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By User deleted
12th Mar 2015 10:26

I think ....

MissAccounting wrote:

sarahg wrote:

If you are going to use Nest who is doing all the administration on the pension on an ongoing basis?  Who will assess the staff, send the paperwork to them, etc?

 

What is the ongoing administration? As you can probably tell I haven't looked into this fully (first staged company isnt until 2017) but I thought with NEST etc. once they the employer and employees were set up then you just needed to file the monthly report with the pension provider which your software should be able to do?

Obviously there will be starters and leavers and I assume staff who get a payrise or hit a certain age will have to be watched out for but I assymed that was about it?

.... you need to find some AE courses. What if you get a new client who is staging January 16?

There are a series of letters, around 13 from memory, which various events trigger and they have to be sent to the employee (can be by e-mail). IRIS AE suite will handle this, many payrolls won't. The trails must be kept for 6 years and there are heavy fines for non-compliance. There is a very heavy admin burden on the employer with AE and most small businesses won't have the time or knowledge (or inclination) to cope and it is likely to fall on the accountant.

If you think AE is just finding a provider and filing a report every time you run a payroll you have a sharp wake up call coming.

To be frank, if you are offering AE services to clients and do not attend any courses to understand what you are doing you are wide open for legal action.

Even the set-up studies have shown that without software assistance it will take in excess of 100 hours to set up an AE scheme.

Assume nothing, book some courses and find out before you get your [***] sued off you. With penalties from £50 per day for getting it wrong, if you miss-advise it could be costly:

The table below illustrates the escalating penalties that might be applied to employers for breaches of their automatic enrolment duties.  

Number of employees                                    Prescribed daily rate (£)

            1-4                                                          50

            5-49                                                       500

            50-249                                                 2,500

            250-499                                               5,000

            500+                                                 10,000

 

Start here:

http://www.thepensionsregulator.gov.uk/employers/what-is-automatic-enrolment.aspx

And then find some course, all the major software and AE pension players are running them, some free, some paid for.

 

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By Dan Woodruff
11th Mar 2015 10:14

Low-cost project guide

We're offering a low-cost, self-service guide to managing the auto enrolment project aimed at small businesses that don't want to pay expensive consultancy. Would this be the kind of thing that would solve your clients' needs?

See here for more information on the problem and the solution.

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Replying to wilcoskip:
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By Matrix
30th Mar 2015 17:30

Dan Woodruff

You are providing an alternative for clients if they want to do it themselves but if I were a small business reading your site or attending your courses, sadly it would make me even more determined to outsource it since it is not simple, however you set it out.  Which puts it back on accountants' desks and we need to determine a solution or how we will handle these requests.

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Replying to Brian Gooch:
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By Dan Woodruff
01st Apr 2015 17:18

Not straightforward

I definitely take the point that auto enrolment is not simple for businesses. We also offer 'expensive' consultancy for those who want to pay, but my feeling is that many won't want to pay (or can't justify the cost) - that's been my experience so far.

That's why we've created the lower cost blueprint. Feedback has been good so far, but it does take determination on the part of the business. The only alternative is then for the business to try and muddle their way through alone, or to pay for consultancy. I think the biggest issue may be that businesses do not spend enough time getting to grips with the responsibilities and then may fall foul of the regulations through this lack of knowledge.

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By zeofiles
11th Mar 2015 13:29

Spot on old greying
We have 3 clients who have staged and for one of these in particular it has been a nightmare. This one client is probably an exception (130+ employees with at least 5 new starters per month) but we spend at least 2 hours extra per month running the various maintenance reports, up loading these to the pension provider etc etc and this is using a pension provider that is 'preferred' by our software.

Each month the software re-[***] the entire workforce as it is possible that someone who wasn't eligible at the start becomes so during the year. Likewise, we are regularly issue refunds to new starters as they can be due a refund of their contributions if they opt out within 30 days of receiving their information pack from the provider - but the provider can't send this pack until we have run and submitted the first payroll with the new employee included and contributions deducted.

Now, we expect (hope) things to be a lot easier at the lower end of the payroll spectrum, but there will certainly be an extra time cost to running the majority of payrolls and we will have to charge for this.

With regards to the set-up of an AE scheme, the IFA we have partnered with are fairly open with our clients and tell them that they could do all the initial set-up and compliance themselves. However given the complexities and time involved in this (not sure about the 100 hrs but it is certainly involved) all have chosen to pay the IFA's fees.

Likewise, as a practice we could have put a proposition to our clients that we would do the initial setup for them. But given the opportunities to get things wrong, miss deadlines etc sometimes you have to question whether even a £500+ fee would be worth it. At the end of the day we are accountants, not pension advisors.

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By Oltonite
11th Mar 2015 13:48

Iris Suggest

At seminars I have been too with Iris they have been suggesting that Accountants can charge anywhere between £2.50 and £5.00 per employee per month on top of what they are charging at the moment. Obviously you will need to decide how much more your clients can afford to pay and decide on a level which will hopefully cover the cost of the additional work you will need to undertake.

I'm not really sure anyone knows how much we should be charging for the additional work as we do not know how much additional work there will be until we have had a client who has staged. Our first one goes in October so that should be an interesting month.

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Karen Bennett
By Karen Bennett
30th Mar 2015 15:59

AE Fees

We were speaking to one of our customers that has staged a company using BrightPay and NEST. For 15 employees (client enrolled early) he charged £400 set and increased payslip charges from £1 to £1.50 per employee, per month for ongoing assessment and communications. Also I have come across a few other figures for just preparing an AE report - £1800 and another one was £3000 for a report and AE advice fees. As Old Greying Accountant mentions some payroll won't handle the AE letters so check this too. The software should re-assess the employees automatically each pay period for you. For ongoing charges it will depend on how much time you will spend doing the ongoing assessment and relevant communications. If your payroll doesn’t do this for you, you’d have to factor in extra fees for additional time.

Thanks Richard & NH for the BrightPay mention.

 

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