Auto-enrolment confusion could land micro-businesses with £22m in penalties
Analysis suggests at least a fifth of micro-business owners have a "limited understanding" of their responsibilities to set up a workplace pension scheme
Around 55,000 micro-businesses in the UK – companies with between one and four staff – are set to face penalties totalling £22m due to their poor levels of understanding of their duty to automatically enrol staff in a workplace pension scheme.
Analysis of The Pension Regulator’s latest report by Paycircle shows that, of approximately 262,0000 micro-business owners expected to set up a workplace pension in 2016 and 2017, 21% have a limited understanding of their auto-enrolment duties in the the weeks before their staging date.
This figure is 9% higher than the number of small business employers (between five 49 staff) found to be confused about their staging date – the date their auto-enrolment duties apply to them.
Based on fines from The Pensions Regulator; currently averaging £400, Paycircle has calculated that the 55,000 businesses that are “in the dark” are risking combined penalties of £22m.
Catherine Pinkney, co-founder of Paycircle, commented:
“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.”
Are you in the dark about auto-enrolment? Here are the steps you need to take to comply in time.