12 August 2016 14:45
One in five micro-firms faces auto-enrolment fines
Britain's micro-businesses could be facing collective fines of up to £22 million because they are unaware of their responsibilities when it comes to pension auto-enrolment.
Pension software provider Paycircle has analysed Pensions Regulator data and found that around 55,000 of the UK's micro-businesses (21% of the total) only have a "limited understanding" of their duty to provide staff with a workplace pension.
There are 262,000 micro-businesses (employing one to four people) out of the 1.8 million employers that must enrol in a workplace pension between now and 2018. Paycircle has calculated that these micro-businesses could collectively face fines of some £22 million for non-compliance. This is based on average fines from the Pensions Regulator of £400.
Catherine Pinkney, co-founder of Paycircle, said:
"The Pensions Regulator has done a huge amount to raise awareness of auto-enrolment responsibilities among the UK's smallest businesses. Yet despite this comprehensive marketing and educational push, a sizeable chunk of micro employers are still very much in the dark as to what to actually do as their staging date descends on them. These businesses need to sit up and take note or risk being slapped with a sizeable penalty."
Charles Counsell, Executive Director for Automatic Enrolment at The Pensions Regulator, said:
"The law is the law. While the vast majority of employers are complying with it, some small employers are still risking fines by failing to understand how it affects them."
Data from the Pensions Regulator shows that non-compliance rose between the first and second quarters of this year. The regulator used its powers 4,489 times in Q2 of this year, up from 4,161 occasions in Q1.