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Ten auto enrolment mistakes and their easy fixes

29th Mar 2017
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The payroll solution that provides all you need for Auto Enrolment.

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Communicating with Clients about AE

There are many ways to communicate with your clients in relation to their automatic enrolment duties. Not every method is right for every situation or for every client. Clients can respond to different marketing messages in different ways. It might be useful to use several forms of communication to get the best result. For example, you could send a series of three emails and / or letters to your clients, 6 months before they are due to stage. It would then be important to follow up with a phone call, adding a personal touch.

Planning

Auto enrolment applies to every employer in the UK, even if you have no eligible jobholders. All organisations, large and small, may have limited resources to handle auto enrolment, especially when we look at the small and micro employer market. In addition, more and more employers are being fined for missing their staging date. A well thought out auto enrolment planning process will be key to success. Setting goals is a good idea in order to help you and your clients handle the stages of AE.

Miscalculations

Assessing each employee's worker category and calculating the contributions and deductions is a crucial aspect of AE. Make sure that you have each employee's information recorded correctly, such as their age and qualifying earnings. Your payroll software should then easily carry out the assessments for you. Your payroll should also automate the contributions and deductions each pay period, thus avoiding any miscalculations.

Pension Scheme Setup

For you and your client, setting up a pension scheme for the first time can take time. Many accountants fail to give their clients adequate time to select and prepare for the setting up of a pension scheme. Your client will need to do some research and choose the best pension scheme for their business and their employees.

Staff Resources

This year alone, over 750,000 small and micro employers will reach their staging date. If you offer payroll services to your clients, it will be important to check their staging dates to find out if you require extra staff resources to handle each client. Good payroll tools should relieve the administrative burden of AE, so you should need minimal, if any, additional staff resources.

Pension & Payroll Compatibility

Each auto enrolment pension provider requires their pension data to be sent to them in a unique and specific format. With the main pension providers, your payroll should easily prepare the contributions file in the correct format for you. Check to see what pension providers are compatible with your payroll software. API tools are another useful feature to speed up the AE process. An API is an integration feature which allows for both pension and payroll to directly communicate with each other. NEST have released API tools which can validate setup information, approve payments and submit pension file data from within the payroll to NEST. Check to see if your payroll offers API features that link payroll to your NEST pension.

To find out more click on BrightPay & NEST web services / API.

Software Costs

You may need to factor in costs to cover any investment in software to cater for automatic enrolment. Some payroll software providers are charging for an AE module or AE add-on. Paying extra for AE functionality will only eat into your profits. Auto enrolment functionality should be a free component as part of your payroll software. For example, BrightPay offer payroll and auto enrolment software for £229 + VAT / tax year.

Declaration of Compliance

It is quite common for employers to fully carry out each of the automatic enrolment duties correctly, only then to forget to complete and submit their declaration of compliance. Check with your client to see who will be responsible for this task. Mark the declaration deadline in your calendar to ensure you remember to submit the declaration.

Director Only Companies

Sole directors who have no employees do not have automatic enrolment duties to perform. However, some of these companies are under the impression that they don’t need to do anything. It is important to understand that if you think that AE does not apply to you then you must communicate this to the Pensions Regulator. More detailed information on director only companies is available on the Pensions Regulator's website.   

Postponement

Some employers believe that if they choose to postpone all employees for 3 months at their staging date then nothing needs to be done in that 3 month period. This is not the case, as all employees must receive a communication within 6 weeks of the staging date advising them that they have been postponed and to let them know when they will be re-assessed. If this communication is not issued, then the postponement effectively never happened and enrolment must be completed retrospectively back to the staging date, which will in itself be a nightmare.

 

 

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