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Key AE dos and don'ts for accountants

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18th Jan 2017
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2017 looks set to be the most challenging year for auto enrolment (AE).

By the end of the year most small and micro businesses will be legally obligated to automatically enrol eligible jobholders into a qualifying pension scheme. The major challenge of 2017 will be to help those businesses into the right workplace pension.

To help accountants get to grips with their clients’ duties, we’ve come up with the following practical guidance to better understand exactly what is required.

Before reaching the staging date, the date that staff by law will need to be put into a pension scheme, you should:

  • Confirm who needs to be contacted – The Pensions Regulator (TPR) needs to know who it should be sending information to, so an employer contact needs to be selected. An accountant can be added as an additional contact to help set up the scheme. The employer contact will then need to find out the AE staging date and start the pension selection process at least six months before staging.
  • Assess the workforce – Do an initial assessment of the workforce. You will need to work out the different types of workers in the business: Entitled workers, non-eligible jobholders and eligible jobholders. Check TPR’s detailed guidance on the different types of worker.
  • Select a qualifying pension scheme – The employer can do this themselves or as their accountant you can put forward a selection of appropriate schemes. Research by the National Employment Savings Trust (NEST) found that almost three quarters of small businesses will turn to an adviser for help with AE, of which 59% would choose their accountant, rising to 70% for employers with four or fewer staff. NEST is one of several pension schemes and has a public service obligation to accept all employers that want to use it as a pension scheme to fulfil their auto enrolment duties*. NEST is completely free for employers to use, with no charges to set up NEST or for ongoing administration.  It’s also free for accountants to use to support their clients.
  • Communicate with employees – entitled workers and non-eligible jobholders will be entitled to receive information about joining and opting in, and eligible jobholders must be told they can opt in during any waiting period and that they can opt out once enrolled. Employees may also need to be informed or consulted on regarding changes to an existing scheme.
  • Review software – You may need to invest in or upgrade payroll systems and software. You will need to be able to pay employer contributions, deduct employee contributions and refund contributions from staff who opt out.

Setting up an AE scheme with NEST

Before getting started with NEST you will need to check that the basics are in place:

  • Find out the staging date – you can find this out from the TPR website
  • Find out what kind of workers are eligible for AE
  • Define what contributions for workers the business will make and how they will be paid to NEST

Once the employer has made these decisions, they can sign up to NEST and create an employer account.

What NEST can do for accountants

NEST has developed NEST Connect, an online hub for professionals, to make it easier for accountants to manage multiple accounts.

It means accountants can access these from one hub, saving time and reducing the risk of errors.

By opening a delegate organisation account you can set up and manage NEST for any number of clients using one login to keep track of everything.

You can use NEST Connect for free to provide a range of AE services to any number of employer clients. It makes it easier for you to:

  • take on as much scheme management as you and your clients want, from set up to ongoing administration
  • view and manage all your clients under one login
  • add as many people as you need to help you run tasks
  • divide the workload among your team in a way that suits you
  • partner up with other professionals, like an accountant or payroll provider, to offer an integrated service

Accountants can have different levels of access to an employer’s account depending on the tasks you’ve agreed to take on.

Clients can even handover complete responsibility if they want to, including setting them up with NEST. The only thing they’ll have to do themselves is accept NEST’s Employer Terms and Conditions.

*Subject to auto enrolment duties under the 2008 Act and agreeing to NEST’s Employer Terms and Conditions

Have you set up a scheme for clients yet? If so, what was your experience?

Replies (2)

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By coops456
26th Jan 2017 11:44

NEST Connect is ok for a handful of clients but needs some serious improvement as numbers increase.

1. We've staged 21 clients with NEST so far. The portal is unwieldy, displaying only 10 clients per page and with no useful dashboard to see at a glance whether contribution schedules have been uploaded, whether contributions are due or overdue.

2. For larger practices/bureaux, user management will also be an issue. There's only 2 of us under our delegate organisation and it's a pain to ensure that we both have access to all our clients.

3. We can send contribution schedules and approve their payment from within Moneysoft - this is great.

Unfortunately NEST doesn't provide the ability to diarise payment of contributions. I'd like to run off the payroll, upload the contribution schedule, and diarise the payment for say the 16th of next month. As it stands, either a) you pay NEST very early or b) either open the payroll or login to NEST to approve the payment.

One of our clients uses People's Pension. Although we can't upload from within Moneysoft, we only have to logon once a month to PP site because we can upload the contribution schedule and diarise the payment for a specific date, all in one go.

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By noab
26th Jan 2017 15:44

Slightly off topic but can anyone help with the following question:

I'm at a client and wondered if anyone could help answer a query - they're currently showing gross pay in staff payslips net of employee pension deduction and then showing employer and employee deduction added together in the YTD column with no clarity on how much the employee deduction actually is. I'm assuming this then feeds through to their P45s and pay is shown net there too. Is this ok and does the presentation depend on the type of pension scheme? Thanks in advance for any help.

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