What are you doing about AE preparations for 2016 or do you even see a need to prepare for 2016?
Why do you think engaging in AE is important? How do you plan to do it?
The next Friends of AE Bristol meeting (run by the CIPP) takes place on 23 June at Racks in Clifton and we’re hoping to get a good mix of accountants around the table at the next one.
If you’re interested in attending the Bristol meeting please get in touch with me or Steve Brice.
Thanks,
Rob
Replies (45)
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Bucket of sand and see what happens legislatively and fine wise seems the best option for the 1 or 2 employee businesses.
We have seen it all before and there is usually a late swerve when a minister is confronted on TV about the cost of setting up a scheme no one wants them opting out for instance. NEST will kick up a stink too when they wise up to what is going to happen otherwise. 100,000's of schemes with pennies going in. The sheer overheads will be emense to look after it.
Its not complacency, is a sensible strategy.
Ditto
Bucket of sand and see what happens legislatively and fine wise seems the best option for the 1 or 2 employee businesses.
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Ditto
NEST might just cost the Public a bomb ...
"As a non-departmental public body NEST Corporation is accountable to Parliament through the Department for Work and Pensions but is generally independent of government in its day-to-day decisions"
So it looks like a non-profit Government Agency like Companies House, created as a back stop in case (as seems likely) no insurance company will touch this crock of s***.
One assumes that at some point MPs will question how much it is costing to run?
Largest
Even my largest client is far too small to have any option beyond NEST, Peoples or Now. The directors were hoping that all their employees would opt out. Only one has expressed an interest - and that's because the company already pays pension premiums for him.
I'm not against pensions but this isn't the right way. An extension to NI would have been a much better option. Less admin for pretty much everyone. I think OGA suggested this some months ago. But - hey - here's an opportunity for the Government to make a few quid on another type of fine !!
Isn't this what NI is for in the first place?
An extension to NI would have been a much better option
Isn't this what NI is for in the first place? Mind you, I understand the treasury has borrowed so much from the NI fund there is not enough to pay the pensions for which it was intended.
NI fund
An extension to NI would have been a much better optionIsn't this what NI is for in the first place? Mind you, I understand the treasury has borrowed so much from the NI fund there is not enough to pay the pensions for which it was intended.
I don't think that there is a NI fund as such. State pensions including the S2P, additional pension etc are on a government pay-as-you-go-basis. Funding for pensions paid this year comes from taxes (and NI) collected this year.
And you thought governments had been carefully putting aside money each year for future committed expenditure?! Nice idea, though.
Surely Not!
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And you thought governments had been carefully putting aside money each year for future committed expenditure?! Nice idea, though.
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What! You mean that there isn't a little box with my pension pot money in it at a DWP office somewhere?
The Government thinks the NI fund is ring fenced.
I don't think that there is a NI fund as such.
There most definitely is, and the Government would tell you that. In fact, they do so here www.parliament.uk/briefing-papers/sn04517.pdf. However, the fact that they borrow from it to fund other things makes a mockery of the ring-fencing concept.
And you thought governments had been carefully putting aside money each year for future committed expenditure?!
I don't know where you got that from Red Leader. My post made clear that they haven't.
Collect and set aside
All they needed to do was collect the extra cash and put it in a properly funded scheme.
What's the problem ?
very large bucket of sand, too
yep, count me in with the bucket-of-sand brigade ... far too early still to even think of the volume of whisky needed for this load of cobblers.
Just so I am clear then....
When the staging date for your client(s) arrives it seems everyone will be either advocating ignoring it or hoping it goes away?
Payroll holds all of the data that is required to make this legislation work for employers.
We can debate whether we agree with it or not on another thread maybe.....but the reality is that IT IS HAPPENING and your largest/best clients are going first!
In terms of choice there are more than just NEST, NOW and PEOPLES taking on all comers but that is what the meeting is about on the 23rd June...why not come?
Director only businesses will need to do something, complete a declaration to exempt themselves in advance, assuming they meet the criteria to do so. Otherwise their staging date (assuming they have a PAYE ref) will stand and they will be expected to complete a full Declaration of Compliance to The Regulator within five months of said staging date at a time when 10,000's of others are doing the same thing to say they did nothing because they meet the criteria mentioned before.
We are approximately 3% through all of the employers who have to stage (only 1.15 million to go!) and have two years (ish) to get the other 97% past the post with the minimum of fuss.
The meeting will aid that discussion and may enlighten some as to how they can do this easily.
380 fines issued already to businesses who had buckets full of sand and four accelerated fines in the order of £2,500 per day for businesses who continued to use their buckets past the point of statutory fines......from what I am reading buckets and sand don't seem to be working!
Another BRS ?
When the staging date for your client(s) arrives it seems everyone will be either advocating ignoring it or hoping it goes away?
Payroll holds all of the data that is required to make this legislation work for employers.
We can debate whether we agree with it or not on another thread maybe.....but the reality is that IT IS HAPPENING and your largest/best clients are going first!
I remember that British Road Services was happening. Until it was abandoned and put on the "too difficult" pile.
sand tempting but
We've got links to an IFA who have people who do nothing else. They handle the regulated stuff and our IRIS software does the rest. Potentially as with RTI another money spinner for us so trebles all round.
In terms of its stated aim the jury will be out for at least 25 years. All of course part of the states deregulation (yeh right) and bonfire of red tape. When you think what we and our clients do for them compared to 30 years ago its frightening and do we get any thanks ?
Already done one client but...
First client to be processed has two employees paid weekly. I will be on holiday on their staging date so I thought I would process it in advance. Sorry, says NEST, no can do. I will have to do an exception report when I return. How user friendly is that!!
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@Steve,
I disagree that this IS happening.
Agreed for larger employers which will need to be done by the book and by and large will have the cash to pay to have it done.
Disagree for the one or two employee firms which by VOLUME are probably 90%+ of all payrolls in the UK, even excluding the director only ones for which the rules have already been relaxed (remember when they said 2 director payrolls had to have one?).
When the tidal wave hits, we may find it washes away the current rules and a new improved simplified version is put in place.
The current systems have been developed with the 2-3% of larger business in mind, not the micro employers.
When the shouting and screeching reaches a high enough pitch the roars will in time be heard and rules will change.
'Tis always thus.
You dont last long in this game if you jump at every new thing
And, if we absolutely have to comply, then it will be done en-masse in the course of a couple of weeks. And yes this is possible for micro companies, its 100% papershuffle, the proper processes will be flouted, opt out signatures etc can be obtained later on while the boss is standing over the sole employee and telling them to "sign here if you want to get paid next week". I imagine NEST will be log jammed and we can appeal penalties, assuming of course there is the infastructure to actually ISSUE tens of thousands of penalties and collect the money. I doubt it! HMRC cant do it, I cant see how a new body is going to cope.
You have to remember employers dont give two hoots about this, its a pure red tape exercises, right down there with Energy Performance Certs, as a "cheap is best" purchase.
Too difficult...
The thing is government do not see this as complicated and have already eased the rules to make it simpler.
It is already a success in government eyes (less than 10% opt out rates) and although The Regulator will always be at least 6 months behind the curve they report that all employers who have needed to stage have done so without exception. They may have stumbled a bit in the initial months but largely all has gone according to plan.....don't think this one is going away any time soon so it may be worth considering a Plan B aside from " it'll go away if I ignore it".
Appealing fines may be an option but where non compliance is willful and corrections are not made to errors accelerated daily fines will ensue. It also takes time to appeal the fines and many employers will be shouting for the regulators time simultaneously so who will pay someone for the time it takes to appeal the fine?
The tools are there for anyone who wants to make this easier for their clients so why not attend a Friends of Auto Enrolment meeting and fine out what all the fuss is actually about?
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@steve, you can try your best to drum up support for the services you are selling but the shriller the call, the less likely people are to listen.
I have a perfect good plan. See what happens.
This is not ignoring the problem, this is acknowledging it, considering the available options, and choosing the more suitable choice for the 1-2 employee clients.
I would say the odds of the rule being changed so if all employee opt out, no scheme is required is high. At least 50:50, if not somewhat higher.
For a one or two person firm this gives a simple route to compliance. NEST wont want hundreds of thousands of empty schemes. It will cost them a fortune.
And if they dont budge, well we get on and do it, and if NEST cant cope, not my problem, easy appeal.
Clients will not thank us for charging them to do something that it turns out was not required due to a late rule change.
Being an 'early bird' with poorly thought out legislation is a poor strategy.
I'm with ireallyshouldkn... re this, though appreciate SteveB's comments.
Yes there may well have been reasonable uptake for the big and medium employers, who have admin teams and everyone accepts auto enrolment is a reasonably good idea for them.
It'll be a different story for the micro businesses. If the rules don't change, I can foresee quite a few spouses (and more scarily perhaps unrelated people) being promoted to directors to get them outside the rules. At the very small end, nobody sees the benefit, and I think that's the main issue. It's forcing businesses through daft hoops that benefit nobody. This is why I think there'll either be a last minute further relaxation of the rules, or tiny employers will do potentially daft things to circumvent them.
Not scrapped, but will fizzle out?
nobody sees the benefit, and I think that's the main issue.
That hits the nail on the head. Following all the various financial scandals very few people can see a benefit and those that have thought about their future, or can afford to, have a private pension already.
or tiny employers will do potentially daft things to circumvent them.
Not necessarily daft…has anyone else got clients who now have a couple of directors and a team of contractors?
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A number of the one/two employee clients we have often find they come and go too. So this year they might have two, next year none if they lose a big contract.
Currently I have two part time contractors and no staff. At other times I have had two PAYE employees. I wouldn't like to predict what I will have by my staging date.
Good luck to the pension regulator keeping up with all of these changes to my staff and whether I ought or ought not be in the scheme. I have opted out for now and don't plan on doing anything else until I see how all this falls.
I can't believe so many people think this will be scrapped
Whilst I agree this is a PITA, it is a necessary evil to keep clients compliant
Is everyone really just going to stick their head in the sand and pretend it's not happening until their first staging date?
I just can't see the government backing down on this and nor can any of the financial advisors that I have spoken to
Alternative providers have spent thousands of pounds developing options for small companies, plus many accountants have spent many hours and lots of money getting themselves up to speed on this. Is it really all going to be wasted?
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Whilst I agree this is a PITA, it is a necessary evil to keep clients compliant
Is everyone really just going to stick their head in the sand and pretend it's not happening until their first staging date?
I just can't see the government backing down on this and nor can any of the financial advisors that I have spoken to
Alternative providers have spent thousands of pounds developing options for small companies, plus many accountants have spent many hours and lots of money getting themselves up to speed on this. Is it really all going to be wasted?
Possibly, we don't know yet. Hence not wanting to waste my time yet.
The relaxation I see, is if there are no members of the scheme, no requirement to open a "shell" scheme.
This is the daft bit that is causing my client base to get agitated and I imagine will upset NEST given they only make a % on the fund invested.
For a company who has staff who want in and the boss sees the benefit, then you get on and do it.
Banging the drum....
Yes I support businesses directly who need to do this and yes I support payroll bureaus who have decided to deal with this sooner rather than later with their clients but....
I can only do this when the company concerned needs to do something and the point of Rob's initial thread was to promote attendance at one of the many Friends of Auto Enrolment meetings around the country so that people might learn the facts of what is involved rather than the fiction.
Fact: fluctuating numbers of employees don't matter anymore your staging date was set based on data received in April 2012
Fact: You can bring your staging date forward but cannot defer it despite what you make thing postponement does it doesn't move your staging date anywhere.
Fact: one and twos are already enrolling as we speak 1st June staging dates involving project pathfinder..it is happening now 13,500 of them in June.
I make no money from the meetings Rob and I organise, in fact it takes up some of my day when I could be doing other things but can I publicly thank those of you who have messaged Rob and I about our meeting on June 23rd and I look forward to meeting you then and shaking off the sand.
It's all gibberish!
'Auto enrolment' = compulsory workplace pensions'Staging date' = compulsory start date (unless you postpone)'Non-eligible Jobholder' = employee eligible to opt into a pension scheme'Entitled worker' = employee with no entitlement other than to ask the employer to administer a pension scheme for them'Qualifying Earnings Band Lower Limit' = NI Lower Earnings Limit
= ?'Friends of Auto Enrolment' = a contradiction in terms! despite what you make thing postponement does it doesn't move your staging date anywhere.
Excuse the typo...
@Euan
Postponement does not move your staging date it merely postpones assessment to a future date.
Employees can still opt in before the postponement period ends and your triennial re-enrolment date mirrors your staging date not your first assessment which can be up to three months after your staging date.
Other contradictions....
@Euan
Auto Enrolment- not compulsory as employees can opt out and some have.
Non eligible jobholder- not eligible to be automatically enrolled but can opt in if they want
Entitled worker- entitled to join a scheme of their employers choosing and and can benefit form an employer contribution where permited
QE Band- Not always the same number but close I admit.
Postponement and Staging Date- I think I have covered in my previous post...
Friends of Auto Enrolment- Why a contradiction?... have you been to a meeting?
I am sure that when this group was first started up by the CIPP (not an organisation that sells pensions) they very much saw this as a place where anyone can go to get the facts on the legislation in an environment where people with experience and no experience can share their thoughts. Those that have attended have confirmed as much and if this is not the case then the group will die....current membership sits in the 0,000's around the country so the Friends organisation seem to be working for some?
O.M.G !
Strewth!!! What an amazing level of ignorance.
Thankfully none of the above are my accountant.
Balls of Steel!!
Wow, you guys are brave. Sending your clients over the top saying "don't worry it will all turn out for the best, they don't really have fines to throw at you!"
One of our partner Accountancy firms in a small market town has taken 12 clients in 2 months from a neighboring practice who is a "head in the sand type."
When clients realise that they can get AE set up for about the same as the initial fine they will probably go find a new accountant.
Give us a call when you are ready but don't leave it too late.
Mandatory
AE is here and it is mandatory so we have to get to grips with it.
For small practices such as ourselves it has not been unusual for us to operate a payroll for a small client virtually free of charge so we get the accounts work. We recognize that this has to change and that these clients will lay their AE dilemma at our door.
We cannot be master of all trades, RTI is a joke as those on the other end of the phone at HMRC have no idea what they are doing or talking about, for example telling clients they must resubmit EPS for previous years to sort problems created by HMRC by misposting payments. Do they not know that we cannot resubmit an EPS for a closed year. Of course to the client it is my fault......
AE is now another payroll process which we will be expected to waltz through free of charge.
We recognized these issues in 2013 and so we set up another Co just for payroll we partnered with selected IFA's and other experts such as HR and employment law to offer a full service, each expert charges independently . We then told all our payroll clients that from April 2014 we as their accountant no longer deal with Payroll and referred them to the new business, we did not lose one
The new payroll Co is not just us, we have a software business involved that writes the software. It is run and managed independently of the accountancy business and the software business.
We have also marketed this with some success to local accountants who like us see payroll as a necessary chore
Friend of Head in The Sand
If an accountant refers small, micro or ones/twos, to an AE specialist who specialises in that market (yes they exist), that firm will not just sort out the compliance and remove the problem cheaply and compliantly, they will even pay the accountant for the referral. The biggest benefit is not the money, it is keeping your client happy.
It only takes 5 minutes on-line to enrol such a friend.
NEST just gives the employer a manual! A friend is someone who for a 'small fee' takes on the problem.
And yes it's commercially viable and sustainable as they're fee based.
And no AE is not an issue about shell schemes. It's about schemes and a shed load of employer obligations. Solutions out there appear to address the former and not the latter.
And you know that express train that was far down the line that you noticed some time ago, well it's now right in front of you and it isn't about to stop. So I think you best do something!
Threat or opportunity
Taking some time now to consider a strategy ahead of their staging date may help employers to turn this into an opportunity
Everyone has to do it
It will take more time than employers think
Good communication can aid employee engagement
planning ahead can help to control costs for example by integrating into the overall benefit policy , making use of salary sacrifice , mimimising operating costs , minimising queries and disruption.
Free check list of decisions employers need to make available from [email protected]
In the sand
The message was, compliant for less than a day's fine or la la la
Apologies for mentioning it on here
False Dichotomy.
The message was, compliant for less than a day's fine or la la la
I believe this is what is known as a false dichotomy.
The Dichotomy
Compliant or not then. I would encourage compliance with mandatory duties, though some on here with masked id would not.
My plan is ...
My plan is to comply with the law and therefore avoid automatic fines. I have just received what I think is my second letter (and a booklet) telling me to ACT NOW to nominate a contact before August, so I have done this (again).
My company has two directors and no employees ...
I can't believe I have been a member of AccountingWeb for 15 years now!
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@ Martin, If you have two directors and no employees then you are confused!
You are EXEMPT from this legislation and can choose your own proper pension scheme away from this mess of a system, or choose not to have one at all.
You do not need to set up a shell scheme or pay The Sharks who keep posting on this thread to do this for you.
Two Directors
@ martin If both directors have employment contracts unfortunately you are not exempt and took the right action, see TPR website for details.
Exemption
With no employers you can notify The Regulator that you need not do anything and step out of the whole process.??
I'm getting a bit weary....
Yet another pension 'reform'.
We've had so many since 1989, I guess if you don't like this one, another one will be along shortly, 8 July maybe? I bet there will be some changes made to pensions in the forthcoming budget.
HMG keep asking us to 'plan' for our retirement, yet the goalposts seem to be attached to well oiled roller skates running on wet lino.
If we recommend NEST are we in effect saying No to the private sector? It is surely the same as saying yes to National Savings, as in effect you are saying No to the stock market. When does this become investment advice?
Let's stop trying to be all things to all clients when we are not really qualified to do so.
Advise your client of the rules and what happens if you don't comply. Recommend they see their IFA, maybe recommend one if they don't have one.
My fear is that NEST is run by HMG and ultimately may prove to be fiasco (a government scheme not working, surely not!). Who will the client blame, when at least in theory they could have gone elsewhere? Will your PII cover this? Your insurer may not share your confidence.
Quick point for the head in the sand brigade. My company, of which I was the only employee since inception until April 2015, staged on 1 June.
Good job my head wasn't in the sand as well or I'd be staring down the barrel of a fine right now.
NEST...
....run by Tata and funded by government money/loans.
Any recommendation that means an individual follows that course of action is advice. If a company implements a scheme as a result of a recommendation but teh individuals spoken to do not join then no advice issue.
Thsi is fine when you speak to Asda (for example) as it is unlikely that the directors of Asda will be in their AE scheme. However if you have a family run medium to small business this becomes more likely and then all of the questions about PI cover come into play!!
Advice issue
For clarity, "Advice to employers on scheme selection is not regulated" see Guide to workplace defined contribution pensions TPR/FCA March 2014. Furthermore trust-based schemes, such as NEST are regulated by TPR and not the FCA. So employers can join their own pension, even when receiving advice on scheme selection. And, if choosing a Master Trust, such as NEST, then this is not covered by the FCAs conduct of business regulations.