Micro employers continue to be the most vulnerable group that are at risk of failing to comply with their auto enrolment duties. According to The Pensions Regulator (TPR), small employers with 5 to 29 employees are displaying higher levels of awareness compared to micro employers with 1 to 4 employees. As small and micro employers reach their staging date, an increasing number of employers are relying on their accountant or payroll bureau for help. Additionally, small employers are the most likely group to leave their employer duties until the last minute.
Research by TPR states that awareness levels have slightly decreased compared to the same period last year. In 2016, awareness levels among small employers was 95%, while among micro employers it was 79%. This compares to 2017, where comparable awareness levels are 87% for small employers and 73% for micro employers.
One of the main reasons for non-compliance amongst small employers is that they fail to submit the declaration of compliance, even once auto enrolment duties have been completed.
Re-enrolment & Phased Contributions
Approximately one third of employers are aware of their re-enrolment duties. About half of employers were aware of the increases in the minimum phased contributions that are beginning in April 2018. The levels of awareness around phased minimum contributions are again lower amongst the small employer segment.
More employers have reported that they would find it difficult financially to contribute to a workplace pension. When comparing spring 2017 to spring 2016, 47% of early stagers and 53% of middle stagers agreeing with this in 2017, compared to 37% and 39% respectively in 2016.
HMRC Basic PAYE Tools & Auto Enrolment
Employers that use HMRC’s Basic PAYE Tools are continuing to struggle with auto enrolment as it will not cater for their employer duties. Unfortunately, Basic PAYE Tools users are unaware of this fact. Many small employers use Basic Tools as it is free, however they will need to process their auto enrolment duties manually, which is obviously open to error. Additionally, HMRC has stressed that Basic PAYE Tools does not, and will never, cater for any of the auto enrolment processes, including assessment, calculating contributions and re-enrolment.
Both The Pensions Regulator and HMRC actively advocate that employers utilise a payroll software solution that will cater for the administrative processes of auto enrolment. Good payroll should provide a free auto enrolment function that can easily process assessment, enrolment, calculations of pension contributions (including phased contributions), ongoing employee assessment, handle re-enrolment, and much more.
A Positive Note...
On a more positive note, the Pensions Regulator reports that attitudes towards automatic enrolment are generally favourable amongst employers. Employers who are due to stage in January 2018 are the most positive towards automatic enrolment. Overall, the majority of employers agreed that the introducing auto enrolment was a good idea for their employees.
Make Life Easy with BrightPay
Many payroll software providers are charging an additional charge for auto enrolment. Some are also charging for payroll and auto enrolment based on the number of clients and/or employees you have. BrightPay is a cost effective payroll solution that includes auto enrolment functionality. For just £229 + VAT, payroll bureaus and accountants benefit from unlimited employers, unlimited employees, auto enrolment automation plus free email & phone support. There’s a good reason why BrightPay has a 99% customer satisfaction rate. Bureaus can now make payroll a profitable part of their business with BrightPay. Book a BrightPay demo today to find out for yourself just how easy your auto enrolment journey can be.