Auto-enrolment is coming and if you’re a small business this is going to be big news for you over the next few months. If the term isn’t something you’ve heard of yet then we recommend you call on your accountant quickly and start asking some of these important questions.
What is auto-enrolment?
The law on workplace pensions is changing. This means that, if you employ at least one person, you’ll now have the responsibility of setting up a workplace pension scheme for all your employees. Auto-enrolment, or automatic enrolment, means you need to put all employees who meet the criteria into a workplace pension scheme – but they don’t need to do anything.
This is a significant change for small businesses, many of whom currently do not offer any kind of workplace pension – and the few that do may find their current schemes do not meet the criteria for auto-enrolment. Failure to comply with the changes will result in potentially large fines for your business, which could cause significant damage.
What are the tax implications?
In some instances there could be some tax implications to your business. Your accountant should be fully aware of these and be able to keep you in the know about any effects auto-enrolment will have on tax.
Will auto-enrolment effect business performance
In some rare cases you may find your financial performance is slightly affected. Your accountant should be able to assess how introducing a workplace pension scheme may impact your business performance, helping to ensure you make the right choice when choosing a scheme for your business.
Do I need to upgrade my payroll system?
The introduction of a new workplace pension scheme may require updating or upgrading your payroll system to one set up to deal with auto-enrolment. Your accountant should check that your system is up-to-date or recommend a platform to upgrade to, such as Xero or FreeAgent, ensuring you’re all ready to roll out your pension scheme.
Who is eligible?
You may find that not all of your employees are eligible for auto-enrolment. Again your accountant should be able to help in assessing your workforce and identifying which of your employees are eligible.
What about my existing workplace pension scheme?
If you already have a workplace pension scheme in place you’ll need to find out whether it meets the criteria for auto-enrolment. Whilst this isn’t something an accountant can tell you, they will be able to point you in the right direction to find out.
Your accountant will play an integral part in the rolling out of your workplace pension scheme as part of auto-enrolment, so having one that is up to speed with the changes will be vital if your business is to get it right. If you need expert advice now contact Email Jon or Email Trevor, or call us on 01730 823000.