Revealed: The fines businesses are being hit with for missing auto-enrolment

Statistics obtained by Startups via the Freedom of Information Act 2000, have revealed the average fine issued to small businesses so far is £540

The average fines issued to businesses who have failed to comply with auto-enrolment have been obtained by Startups via the Freedom of Information Act 2000 (FoIA).

The data, previously unreleased, has revealed for the first time the average value of Fixed Penalty Notices (FPN) and Escalating Penalty Notices (EPN) issued to firms who have failed to auto-enrol their employees into a workplace pension scheme up until the end of March 2017 for all fines – and April 2017 for EPNs.

Businesses which employed between 1 and 30 members of staff were hit with an average fine of £540, while those with a headcount of between 31 and 250 were hit with an average penalty of £990.

Larger non-complying enterprises with over 250 employees on the books will also be forced to pay an average fine of £1,390 – with those in the ‘Zero or Not Known’ category (those who have yet to complete the declaration of compliance) also handed an average fine of £500.

All fines recorded have yet to paid, suggesting the average value may rise should it not be resolved.

In total, 16,218 fines have been issued for non-compliance thus far – though as the numbers released are at penalty level, some fines will be for the same employer.

For businesses of between 1 and 30 members of staff, 9,089 penalties were issued, with 1,143 handed out to firms with between 31 and 250 workers.

Building a website for your business idea is easier than you might think. Our online tool ranks the top website builders that offer free trials.

Larger companies with over 250 staff received just 61 fines – suggesting smaller businesses are much more likely to ignore their auto-enrolment duties and be punished as a result.

Once again, those who failed to complete the declaration of compliance or the ‘Zero or Not Knowns’, were issued with 5,925 fines.

One of the final stages of the auto-enrolment process, the Declaration of Compliance signifies to The Pensions Regulator how you have met your responsibilities as an employer and that all the information you have submitted is correct.

With a completion deadline of five months before your staging date, it is your legal responsibility as a business owner to ensure its submitted on time regardless of whether or not you physically completed the form yourself or sought the help of an accountant.

According to the info obtained by Startups, 84% of all Declaration of Compliance forms completed by 31 May 2017 were by businesses with between one and 30 workers – a total of 502,732 firms.

11% of all submissions were by enterprises with between 31 and 250 businesses (66,114), 2% by businesses with a headcount of above 250 (10,004) and 3% by ‘Zero or Not Known’ (19,885).

A report released last month by The Pensions Regulator, found that 800,000 UK businesses are yet to be auto-enrolment compliant. 

Its Declaration of compliance report revealed that 598,126 employers (representing 7,997,000 workers) had declared compliance up to the end of May 2017.

As a result, its suggested 1.3 and 1.4m small and micro-sized enterprises still have obligations to meet – which means around 800,000 have yet to comply.

Part of the The Workplace Pension Reform, auto-enrolment requires every UK business enrol their employees into a workplace pension scheme – provided the worker earns more than £10,000 and is aged between 22 and the state pension age.

For everything you need to know about the auto-enrolment process, visit our dedicated Pensions Zone.


(will not be published)