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New Employers & their Auto Enrolment Obligations

14th Jun 2017
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The payroll solution that provides all you need for Auto Enrolment.

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All employers must complete their auto enrolment (AE) duties, including new employers. From the 1st of October 2017, clients who become an employer for the first time will immediately have AE duties to complete for any staff they employ. As soon as your client employs their first member of staff their automatic enrolment legal duties will kick into effect. If your client becomes a new employer after the 1st October, they will not have a staging date. Their auto enrolment duties will apply from the first date that the first employee starts to work for your client, which is known as their duties start date. Worryingly, according to research conducted by The Pensions Regulator (TPR), 49%, almost half of accountants asked did not know that new employers would have AE duties.

Setting up your client

Where your client is a new employer and about to employ someone for the first time, they will need to complete certain tasks in preparation for auto enrolment. As a first step, they will need to register as an employer with HMRC. As a second step, you or your client will need to inform TPR of the chosen point of contact for auto enrolment. Your client should be ready to comply with their legal auto enrolment duties as soon as the first new employee begins employment.

Employer spot checks

The Pensions Regulator has begun auto enrolment employer spot checks across the UK. Inspectors will visit hundreds of businesses over the coming months to check and ensure that employees are being given access to a workplace pension scheme. It is important  that you make your clients are aware of these legal duties and ensure they take steps to avoid being fined by the Regulator.

Next Steps to comply

Both HMRC and the Pensions Regulator recommend that employers utilise payroll software that supports the process of auto enrolment. It is advisable that the payroll is also integrated with the pension provider. Be aware that Basic PAYE tools will not cater for your clients auto enrolment duties. Read: Pros and Cons of HMRC’s Basic PAYE Tools for Auto Enrolment

On the duties start date, you must assess all staff to see if they meet the criteria to be put into a pension scheme. Any eligible employees must be automatically enrolled into a qualifying auto enrolment pension scheme where the employer must also make contributions to the pension pot. All employees must receive communications informing them how auto enrolment will affect them and what their rights are. Good payroll software, such as BrightPay can automate these tasks for you.  

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