Auto Enrolment

What is Auto- Enrolment?

The Pensions Act 2008 introduced new duties for all UK employers.
If you own a business that employs one worker or more you’ll need to:

  • Set up a workplace pension scheme that meets the new rules
  • Automatically enrol all eligible workers
  • Pay contributions into the retirement pots (pensions) of eligible workers
  • Enrol other workers if they ask to join the scheme

Conditions for Auto Enrolment

The employer must automatically enrol all employees into a pension scheme and make contributions to pension if all the following apply:

Are Your Employees are classed as a “Worker”?

A workers classification criteria is:

  • You have a contract or other arrangement to do work or services personally for a reward
  • The reward is for money or a benefit in kind, e.g. the promise of a contract or future work
  • You only have a limited right to send someone else to do the work (subcontract)
  • You must turn up for work even if you don’t want to
  • Your employer must have work for them to do as long as the contract or arrangement lasts
  • You are not doing the work as part of your own limited company in an arrangement where the ‘employer’ is a in fact a customer or client
  • ‘Qualifying earnings’ are usually the amount you earn before tax between £5,824 and £43,000 (2016-17) a year
  • Qualifying earnings are usually the amount you earn before tax between £5,824 and £43,000 (2016-17) a year

Exemptions from Auto-Enrolment

Automatic enrolment duties don’t apply when a company or individual are not considered an employer.

You won’t have any duties if you meet one of the following criteria:

  • You’re a sole director company, with no other staff
  • Your company has a many directors, none of whom has an employment contract, with no other staff
  • Your company has many directors, only one of whom has an employment contract, with no other staff
  • Your company has ceased trading
  • Your company has gone into liquidation
  • Your company has been dissolved
  • You no longer employ people in your home (cleaners, nannies, personal care assistants, etc)

Employer Vs Employee Duties

Employer Duties/Impact

Employee Duties/Impact

Legal duty to write to all your staff individually to explain how auto enrolment applies to them (templates attached in appendix)

Has the right to Opt Out or In

Must pay a minimum percentage of your ‘qualifying earnings’ into your workplace pension scheme

 

Reduced Profit due to contributions

Joining a workplace pension scheme means that your take-home income will be reduced

Deductible expense

Mean you’re entitled to tax credits or an increase in the amount of tax credits you get (although you may not get this until the next tax year)

Employee benefit increased

 

Give information to the pensions regulator about how you have met your auto enrolment duties every three years

Mean you’re entitled to an income-related benefit or an increase in the amount of benefit you get

Submit employee data every pay period to pay their contributions to the Pension Regulator

Reduce the amount of student loan repayments you need to make

Monitor employee’s ages and earnings to see if any one needs to be auto-enrolled

 

Deadline to Enrol

Auto-enrolment is being phased in over several years, starting with the largest employers and eventually taking in people who employ just one person.

Your staging date is the deadline by which you’ll need to have a scheme in place and be ready to enrol workers and start making contributions to their pension pots.

You can find out your staging date using the Pension Regulator website tool by clicking here

Please note we are not Pension Advisors therefore we cannot give you advise on what may be the best pension scheme for your business. We strongly advise you seek independent advice on the pension scheme that will suit your business and employees first. Once you have selected your pension scheme, we can then help get this set up on your payroll scheme.

image
image
image

Testimonials From Satisfied Clients

Female icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Lynsay C

Jenny has been a huge support to our business over the last 3 years, assisting with the Accounts, VAT & Payroll. She is extremely professional, knowledgeable and patient. Jenny has always provided quick and helpful response to my questions and keeps me up to date with current accounting information. It’s a pleasure to work with Jenny and I would highly recommend J A Neale Bookkeeping and Payroll.
Male icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Ian C

Jenny took over my books and they required some tidying up and did a superb job.Jenny is always happy to answer questions, goes the extra mile and is great to workwith. I have no hesitation in recommending Jenny. Top qualities: Personable, Good Value, High Integrity.
Female icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Hannah S

Jenny was very helpful, professional and fast to respond to any queries I had. She completed my self assessment very efficiently and I would highly recommend her services to anyone.
Male icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Paul S

We approached Jenny with an urgent ‘last minute request’ for support in collating Partnership management accounts. Nothing was too much trouble. We were worried that they were in a muddle but Jenny took care of everything in record time and put our minds completely at rest. We would commend her to any SME, partnership or sole trader looking for a speedy cost effective solution.
Female icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Ros E

Jenny has provided me with book-keeping services now for quite a while. It was something I was apprehensive with because my previous book-keeper had caused me quite a lot of problems. Jenny has sorted out all my problems and got me on track with knowing where I stand with my business – I have no hesitation whatsoever in recommending her.
Female icon on J A Neale Bookkeeping and Payroll Services website in Bury st Edmunds in Suffolk

Sophia W

When I needed help to sort out the accounts I found J A Neale’s Bookkeeping and Payroll Services on the internet. She took over the considerable tangle I’d created for myself and swiftly put it all in order. My annual accounts were filed and accepted on time, and I am delighted to recommend her bookkeeping services

Get In Touch

If you have any questions, please contact us and we'll be in touch.