Step 1: Check if auto enrolment applies to your business

Auto enrolment only applies to businesses that employ staff, so if you’re a sole trader and don’t have anyone working for you, you won’t be affected – and in certain circumstances, even if you do employ staff, you may not need to take any action. Examples of businesses which are exempt would include a company where the only people on the payroll are owner / directors who don’t have contracts of employment; a one person company using payroll to be tax efficient, or a limited company run by a couple who are both on the payroll, both directors – and neither of whom has a contract of employment.

Step 2: Check which of your staff are eligible and confirm your ‘staging date’

Once you’ve ascertain whether your business comes under the scheme, you will need to work out which of your staff you need to auto enrol. The terms of their contract of employment will determine whether you are legally bound to enrol them, or whether they are entitled to choose if they want to be enrolled.

If you have an employee who is eligible for auto enrolment, you need to confirm your ‘staging date’ with the Pensions Regulator – this is the date by which you have to implement pensions for your eligible staff, and it can vary depending on a range of factors, including – but by no means limited to, the size of your business.

Step 3: Make an action plan

There are lots of things you will need to do in the 12-18 months leading up to your staging date; an action plan will help to keep you on track and check off key tasks along the way.

Things your plan will need to cover include:

What if I already operate a pension scheme?

If you already operate a pension scheme for your staff, you need to check that it is compliant with the type of arrangements under the auto enrolment programme. Not all schemes will satisfy the minimum criteria necessary, and if your existing scheme falls short, you’ll need to take action to bring it in line.

Companies needing to make small increases to their contributions may be able to make use of one of the many standard schemes available, such as NEST or People’s Pension. Businesses with larger headcounts that need to make higher contributions will be in a strong position to negotiate with a pension provider and get some attractive deals to help them make their scheme compliant.

Leave it to Inca Caring Accounting!

Find out how your business is affected From just £49 (+ VAT).

Auto enrolment is a complex area, but Inca can help you to determine if it applies to your business, and if so; who in your company is affected; your staging date, and when you need to start your action plan. We are offering this service to Inca clients from just £49 + VAT – a small price to pay for understanding exactly what impact auto enrolment will have on your business, and far more preferable to back payments, penalties and fines.