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Autoenrolment - the next mis-selling scandal?

Autoenrolment - the next mis-selling scandal?

I have been trying hard to avoid getting involved with autoenrolment if I possibly can. I have been on a few courses, numerous guides and spoken to a number of colleagues who have been a bit braver than me and had a go and frankly I'm glad I have tried to avoid. It sounds truly awful.

It seems to me that if you can make money from your business by avoiding unnecessarily complicated areas then that should be the way to go

I had a small client call in this morning asking for some help with autenrolment. She has always done her own payroll and only has one employee who is eligible for autoenrolment; she has set up a company pension herself and her one employee has been automatically enrolled. She is being charged £750 a year by the pension company and her employees pension contributions are about £20 per month. She choose one of the pension providers suggested by her bookkeeping software providers.

Something doesn't feel right about this. I have never felt comfortable about very small businesses having to get involved in areas like this. The potential for rip off is clear for all to see. This client would have been better off in my view with a government backed scheme where the charges are minimal but as an accountant I am not authorised to recommend or advise on pensions.

Why wasn't the government brave enough just to up the NI charges and ring fence the money collected? 

RTI, autoenrolment, MTD blah blah its just a never ending stream of unnecessary and messy interference.

 

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By tom123
01st Dec 2017 14:30

As far as I can recall, advising a COMPANY on pension scheme options for AE did not fall into the category of regulated advice.

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By jcace
to tom123
01st Dec 2017 14:47

You are correct tom123. But advising an employee whether or not they should opt in or out is regulated. http://www.thepensionsregulator.gov.uk/your-role-helping-client-choose-s...

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01st Dec 2017 14:43

She's being stitched up

Tell her to switch to NEST

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01st Dec 2017 14:48

Totally agree. That is my fear. Alot of people are going to get stitched up hence my post.
I did mention NEST to her in the context of finding a scheme with much lower charges in her situation.
Frankly I think her employee might as well just opt out

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01st Dec 2017 14:51

True Potential is free to set up £750 is way over the top.

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By Matrix
01st Dec 2017 16:57

AE is not a bad money maker. I would not avoid it if I were you, don't really know how you have managed to avoid it for so long. I have been surprised that small employers have paid us to set up a scheme instead of doing so themselves, but we did not invent the rules.

We mainly use True Potential but have experience with 4-5 others too. They can use Nest if they wish but our set up fee and ongoing fees would be the same.

Anyway, you have missed some potential fees with this client. By the way, I am not criticising you and I don't love pensions at all, but I learned 2-3 years ago after a meeting with an FA that I would prefer my clients to pass their money to me rather than someone else and I have worked hard to acquire the AE knowledge base to justify my fees.

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04th Dec 2017 14:09

Dare I mention the unscrupulous payroll providers charging a small fortune for their AE module. Thank goodness for the likes of Brightpay and Moneysoft who haven't jumped on the bandwagon.

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to ScribbleD
04th Dec 2017 14:35

Does anyone still use Sage for payroll?

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to Euan MacLennan
04th Dec 2017 14:57

I suspect there are still those who think that if you pay more you get a more superior product. Definitely not true in this case. Let's hope they come to their senses soon.

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By tom123
to Euan MacLennan
04th Dec 2017 15:09

I have to - company decision ;(

Mind you, it's not too bad if you have been used to it's foibles for years.

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to Euan MacLennan
07th Dec 2017 10:20

unfortunetely yes

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to Euan MacLennan
07th Dec 2017 22:14

I have used Sage Payroll for years and wouldn't use anything else. It does everything I want. Why use anything else?

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By DMGbus
to ColinNibbs
08th Dec 2017 08:09

I had a client earlier this year who changed their business entity from sole trader to Ltd Co. Their version of Sage payroll could not cope with two particular necessary filings in connection with the closedown of the sole trader PAYE scheme in-year. It was necessary (per Sage helpline advice) to do the necessary two filings via HMRC Basic Tools.

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to ColinNibbs
08th Dec 2017 09:59

ColinNibbs wrote:

I have used Sage Payroll for years and wouldn't use anything else. It does everything I want. Why use anything else?

Have you tried owt else and do you pay the exorbitant costs ?

Totally unsuited to the size of business I deal with, I'm afraid.

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to Euan MacLennan
08th Dec 2017 09:38

Year one at the current practice I work at it was all Sage. At the end of year one, I convinced a switch to Moneysoft.

Then the only payroll on Sage was our own (I don't do that one).

At the end of year 2, ours switched to Moneysoft as well.

Now, all the payrolls are done in half the time :)

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07th Dec 2017 11:12

Why, because it was too easy.

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07th Dec 2017 11:15

To those who "usually use" one provider over another I would suggest caution. Individual nuances between schemes certainly do make one more suitable than another depending on funding levels, salary profiles and a host of other factors. In fact it was the need for the same standard of analysis as other work that persuaded me to disengage.

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07th Dec 2017 11:47

The comments here have summed up Auto-Enrolement. Its here to stay and it appears that the age limit is to be moved to 18 years so that means more contributions from more people.

It is just a shame HMG did not prevent the small employer being over-charged.

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10th Jan 2018 11:53

Whats the point of using accountants for our business when we can get on the internet for free?

However they can offer support and guidance, they can do it for us and businesses will pay. I mean it’s their time and they are in business, why should it be free.

£750 per year could sound expensive. However what about some accountants who are charging £500-£1000 just to set the scheme up and then letting the employer deal with the scheme.

The line I do not agree with is 'The potential rip off is clear to see'. Well, what is not explained in the article is what else is included for their money. Are they fully compliant with this scheme, does this mean she will not get fined £50 per day for non-compliance?
What else is included within the fee? Training for staff, support for the business. These things are not there with the government backed scheme which the employer would have to do themselves and I’m sure the employer’s time is not free! (Not to mention the IHT issues with the scheme).

Put it like this, you get what you pay for. Some businesses need more support than others and will pay for a better product and service. This should not been seen as a tick box exercise which needs to get off my desk, this should be seen as an opportunity to invest in my staff and my companies pension scheme

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