5th December 2017 Posted by - Alexander Accountancy
Have you met the requirements of Workplace Pensions?
During 2017 the majority of small and medium sized businesses have had to implement a Workplace Pension in order to comply with the new guidelines set out by The Pension Regulator. Many however, have failed to provide a pension scheme for their employees. For the period April to June 2017, 9,265 compliance notices were issued to businesses which resulted in 4,794 fixed penalties and 1,384 escalating penalties being imposed for non compliance.
Many claimed their non compliance was unintentional and that they had a reasonable excuse.
Circumstances which do not amount to a reasonable excuse include:
- you or a member of staff were ill
- you relied on someone else and they let you down
- you found the online system too difficult to use
- you didn’t get a reminder
- you made a mistake
Some trusted advisers are also adding to this problem by giving inaccurate advice and guidance.
The most common mistakes are made around exemptions which include:
- All sole traders are exempt
- Limited companies with more than one director are exempt
- Employers with employees earning below £10,000 per annum are exempt
The Limited company scenario where a husband and wife, who are both directors, receive a regular salary is frequently misunderstood. The legal status defines that a person receiving a regular salary is an employee and the company therefore has workplace pension duties. Legal precedence has also been set that states that a contract of employment does not have to be written, it can be verbal or implied. Telephone advice given by The Pension Regulator contradicts this. They insist that because a written contract of employment does not exist then the company is exempt, but a written response quotes that a contract of employment can be written, verbal or implied.
So which piece of advice should you follow?
Alexander Accountancy believe that you should implement a pension scheme and not risk a spot check and potential fine from The Pension Regulator. Every business has a unique set of circumstances and it is the employer’s responsibility to ensure all of the criteria are met.
Alexander Accountancy have a proven track record in offering expert advice to ensure companies meet all of their obligations and avoid unnecessary fines. Why not contact our business advisers for a free consultation to see how we can help you make the right choice, please email us for a meeting at in**@al*******************.uk or telephone us on Burton on Trent 01283 743851.
