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So, why ...
As soon as self assessment season if out of the way
So, why post this article before the filing deadline?
great summary Rob...
With 169 fines issued already from last year as well as 1100+ warnings issued....... and that only includes stagers to July 2014...... this year looks like a big challenge for smaller employers let alone next year.
Pension auto enrolment and small businesses
Small businesses are certainly struggling with pension auto enrolment. The Pension Regulator website contains too much information which leaves people feeling baffled.
I am doing what I can to give clear simple practical advice to my clients, but many are just not dealing with the process.
I fear there will be many more fines.
TPR Research....
Recent TPR Research also tells us that nearly 80% of these businesses will be looking to their accountants to guide them through AE.
Interesting the same research tells us that only 50% are expecting to pay for it though!
I think that was why Rob was suggesting that maybe Feb would be a really good time to decide how much of this accountants can do in house and how much of this requires strategic partnership because come 2016 the time for talking will be done as nearly 50,000 businesses will stage each month rather than just under 50,000 in a year.
TPR is the main source of misinformation
With businesses staging for AE shooting up from 40,000 this year to 500,000 in 2016 and then 800,000 in 2017, how are you preparing for your clients?
They may have a staging date, but how many of them will need to set up an AE compliant pension scheme?
It is not surprising that small employers are confused about the requirements of auto-enrolment when the letter from the Executive Director of TPR a year ahead of the staging date is full of dire warnings, but completely fails to mention that if the employer has no staff (workers) apart from the director(s), the letter can be ignored because the company is not required to set up an AE pension scheme. Many such OMBs may well be ignorant of the AE requirements, but as they are not affected, why should they know anything about it?
It would be more helpful to all of us if those in the pensions industry put pressure on TPR to mend its ways, rather than trying to frighten accountants by making mountains out of molehills.
Mountains and molehills...
Even though there are some exemptions everyone seems fixated on the pension scheme.
Assessing staff is the key task because the exemption for so called "close company's" is around setting up a scheme not an exemption form assessing all staff and completing the registration of compliance.
Not completing a registration of compliance is what 169 firms have been fined for as at July 2014-Dec 2014. This process tells the regular that they have complied by doing nothing. Seems strange but that will remove this company from the radar as far as TPR are concerned.
There is certainly no wish to scare anyone into doing unnecessary work but too many businesses and accountants think they can leave their planning and decision making until next year when 500,000 business will actually need to do this! There will be no time to debate these issues of whether they need a scheme or not. Processes will need to be in place by the middle of this year at the latest otherwise there may be a huge increase in fines issued by the regulator.
Its not as if anyone in the adviser community invented this stuff it came from government and is now a legal requirement. It will happen anyway so we can either ignore it or deal with it in the most effective way we can.
No wrong answers just decisions to be made.
Payroll and AE are linked and anyone who is intending to run payroll in 2015 and beyond will need a strategy to deal with AE or may find they are not doing payroll anymore... and that may be a strategy by the way.
Keeping it Simple
Henry Tapper of Pensions Playpen recently posted an excellent article about auto enrolment where he said that clients want solutions not just information. By engaging with clients to explain what they can expect and offering to help them we get thanks, recommendations and people paying for auto enrolment services.
Much of the compliance for micro firms is straightforward, the knack is knowing which need more compehensive advice and how to add relevant disclaimers to concentrate peoples minds. It isn't any good to provide a very simple Get You Out of Jail free service without doing at least a little due diligence to protect ourselves and our clients.
Many people aren't aware that single director firms with no staff (who are exempt from Auto Enrolment) are still likely to get a letter from The Pensions Regulator inviting them to complete the full auto enrolment framework. This is because TPR have a list of all active payrolls but have not been told how many people work at each or how many directors. How good would your micro single director firms feel if you have a simple free way of getting them declared exempt? Its a marvelous way to generate referrals and general good feeling.