Missed auto-enrolment deadlines could cost UK businesses £25m
Over 2,000 of the country's small and micro businesses have already incurred fines for missing the government's auto-enrolment deadline
The UK’s small and micro-businesses could face being subjected to fines totaling an estimated £25m for missing the government’s deadline for auto-enrolment, according to research from Paycircle.
Data from The Pensions Regulator has shown that over 95% of the 63,700 companies that have ‘staged’ (set up an auto-enrolment workplace pension scheme) since July 2012 have complied with law, yet 2,234 businesses have missed the deadline and have been issued with fixed penalty notices of £400.
Of the 1.8 million employers set to auto-enrol between now and 2018, if the current rate of fines continues the research suggests that around 63,000 businesses (3.5%) will receive non-compliance fines equating to more than £25m.
The research also claimed that 40% of micro employers (businesses with less than four staff) will seek external advice to the tune of £317m between now and 2018. This means the total cost of compliance for small UK businesses could be as much as £350m.
Catherine Pinkney, co-founder of Paycircle, commented:
“In reality, the percentage of smaller employers that incur a penalty is likely to be higher than the rate to date as smaller companies have less people and time for administration duties. Now is the time for small firms to be proactive about auto-enrolment, or face fines that can rapidly escalate.”
Learn more about auto-enrolment and what it means for your business here.