Aug 2015
7
The Pensions Regulator publishes recent automatic enrolment research findings
The Pensions Regulator has published new research which tracks awareness of auto enrolment amongst employers and intermediaries and how they are preparing to act.
The Key Findings from the Intermediaries survey were:
- There was almost universal awareness of auto enrolment amongst all types of intermediaries (between 97% & 98%), with bookkeepers similarly high (94%).
- Payroll administrators reported a significant increase in their ability to answer clients questions, with 54% (up from 33%) believing they are fully able to answer all queries.
- There are increasing proportions of intermediaries planning to act on behalf of their clients, as opposed to taking more passive roles of providing information or technical advice (payroll administrators 71%, IFAs 53%, accountants 44% and bookkeepers 42%)
- The vast majority (96% or more) of accountants, bookkeepers and payroll administrators planned to provide a service to micro employers, while most IFAs did (78%).
The Key Findings from the Employer Survey were:
- Nine in 10 employers staging between August and November 2015 had commenced for automatic enrolment.
- 7 – 10 small employers expected to rely on an adviser to provide practical assistance with automatic enrolment.
- Most (79%) employers staging in 2015 knew their staging date. A lower proportion (29%) of employers staging between January – November 2016 knew their staging date, similar to the (30%) of employers staging between January - April 2017 who knew their staging date.
- Awareness of automatic enrolment increased significantly amongst both small and micro employers.
Aug 2015
6
The Pensions Regulator issues warning to SMEs
The Pensions Regulator (TPR) has issued a stark warning to hundreds of thousands of small employers, after new research has shown that almost two thirds of SMEs do not know the exact date they need to comply with new workplace pension duties.
Research is published twice a year by the Regulator and tracks awareness of automatic enrolment among employers and intermediaries. Encouragingly, results of the survey show that the majority of employers due to stage between now and November 2015 have started preparing and are aware of their staging date, however awareness amongst those due to stage in 2016 and beyond drops significantly.
Speaking on the subject, Charles Counsell, executive director of automatic enrolment at TPR has said, ‘The challenge of ensuring 1.8 million employers meet their duties by April 2018 is significant and the research shows many employers are still not preparing early enough. We continue to develop new tools on our website to simplify the process for employers and we are using a diverse range of communications to reach out to employers, but my message to employers remains clear: start getting your plans in place or you risk a financial penalty.’
The Pensions Regulator advises that employers should start preparing for automatic enrolment 12 months ahead of their staging date - the date set in law for when their duties will start. Failure to meet auto-enrolment duties could ultimately lead to employers receiving a fixed penalty notice, and the possibility of escalating penalties applied per day for failing to comply with a statutory notice.
Jul 2015
26
TPR revises estimate of number of small and micro employers to be impacted by Auto Enrolment. Estimate increased by half a million!
The Pensions Regulator has revised its estimate of the number of small and micro employers who will need to stage between now and 2018.
TPR figures show that a total of around 1.8 million small and micro employers will stage over the next three years, compared to the previous estimate of 1.3 million.
TPR said that the reason for the revision of the estimate was that more business start-ups had entered the UK market, and that there were lower numbers of business closures than anticipated.
However it should be noted that a large number of micro employers will be one director companies where the director is also the sole employee. These employers are effectively exempt from auto enrolment and can "opt out" by informing TPR.
Jul 2015
25
TPR publishes guidance on pension scheme selection
The Pensions Regulator has recently published guidance for employers and advisors on pension scheme selection for automatic enrolment.
Changes to the law on workplace pensions and the roll out of auto enrolment mean that every employer in the UK has to automatically enrol certain members of staff into a workplace pension scheme.
Small and micro employers have, since 1st June 2015, come into the auto enrolment net (i.e. staged) and the number of these employers "staging" will increase dramatically from January 2016.
The guidance from TPR is a welcome inclusion for those employers/advisors who may wish to research the various pension schemes available for enrolling their employees.
Many small/micro employers will automatically opt for NEST but it is advisable to be aware of the options available. Some employers may choose NEST for one segment of their employees while opting for a more tailored scheme for other employees.
The TPR guidance is available here.
Jun 2015
19
What to do if you are exempt from Auto Enrolment
Automatic enrolment duties don’t apply when a company or individual are not considered an employer. You won’t have any duties if you meet one of the following criteria:
- you’re a sole director company, with no other staff
- your company has a number of directors, none of whom has an employment contract
- your company has a number of directors, only one of whom has an employment contract
- your company has ceased trading
- your company has gone into liquidation
- your company has been dissolved
Before your staging date, you can let the Pensions Regulator know that you are exempt. This will avoid you having to register with a pension scheme and submit a declaration of compliance.
If circumstances change and you no longer meet the above criteria then you need to let the Pensions Regulator know.
More information, including the link for letting the Pensions Regulator know about your exempt status, can be found here.
May 2015
21
Automatic Enrolment: Employer Duties and Director Exemptions
Who is subject to the legislation?
Automatic enrolment legislation affects all individuals who are classified as workers. The legislation will affect all workers between the ages of 16 and 74 who work or ordinary work in the UK. A worker can be either under a contract of employment (an employee) or be a personal services worker who has a contract to perform work or services personally and are not providing the work or services as part of their own business.
Who is a personal service worker?
A personal services worker cannot send a substitute or sub-contract the work unless they have a legitimate reason to do so (e.g. Illness). A personal service worker will have a “contract of service” to perform services personally as opposed to a sub-contractor having a “contract for service”. Various indictors will determine whether a contract is a “contract of service” or a “contract for service” and an employer must take all relevant considerations into account and make a reasonable judgement.
Should a director be considered a worker?
A director will be classified as a worker if he or she both works under a contract of employment and there is at least one other person working for the company under a contract of employment.
Employer Duties with respect to Directors.
A sole director could not be considered a worker even if he has a contract of employment.
If an additional director was to join the company under a “contract of service” contract then the company does not need to consider whether or not they are doing this work on behalf of their own business. A director who is not an employee is always exempt. The initial director is still not classed as a worker because there is no one else working for the company under a contract of employment.
If an additional personal service worker is hired under a contract of service who is not a director, then an employer duty will arise in respect of this worker.
If a worker now joins the company under a contract of employment (as an employee), then an employer duty will arise in respect of this employee and also in respect of the director who has a contract of employment. This is because there is now another person working for the company under a contract of employment.
If your company has received a letter from the pensions regular informing you of your staging date and you believe automatic enrolment duties do not apply to you because a director exemption applies then can contact them by emailing [email protected] . Visit this page to find a pre-populated email www.tpr.gov.uk/employers/what-if-i-dont-have-any-staff.aspx. This pre-populated email will prompt you to inform them of what type of director exemption applies, what the letter code for the company is, the PAYE reference and the companies house number.
May 2015
15
BrightPay causes a stir at Accountex
BrightPay attended Accountex this week. Accountex is the UK's national accountancy exhibition and conference.
There was huge interest in our payroll software, mainly due to 2 key selling points:
- Its competitive price point (£199 plus VAT per annum which includes support) and
- Its ability to deal with all aspects of automatic enrolment seamlessly and elegantly.
The one question I kept getting asked was "how can you do it at that price?".
We have been in the payroll software business for 22 years and this has been our business model. We offer affordable payroll software that is intuitive and self explanatory, thereby cutting down on the support requirement. Where support is needed, this is available over the phone, by email or through the many instructional videos and online support channels that we employ. We currently have 12 dedicated support staff catering for 65,000 employers. We constantly review our staffing requirements and take on and train more staff, as and when required.
Try it out for yourself and you will understand. Payroll software does not have to cost an arm and a leg :)
Mar 2015
13
Auto Enrolment – Are you covered?
Every employer in the UK will have to enrol their employees into a pension scheme and they must contribute towards that pension. This process is called Auto Enrolment. Employers will need to prepare for their new Auto Enrolment duties and responsibilities or face hefty fines. There is a lot of uncertainty, ambiguity and doubt surrounding Auto Enrolment for employers.
However, there is a clear opportunity for bookkeepers, accountants and payroll bureaus to capitalise on these new obligations for their clients. Contrary to popular belief, confusion isn't a bad thing. In fact, confusion can work to your advantage. It can be a platform for payroll providers to demonstrate their automatic enrolment expertise and knowledge to their clients. This knowledge will position you as a credible and reliable authority on employer responsibilities.
Opportunity Knocking
Pension schemes will become a part of day to day life for each and every employer in the UK. Thousands of employers will begin to look to auto enrolment experts for advice, counsel and an easy solution. Employers that previously did their payroll in house may look to outsource this role to a payroll and auto enrolment expert. Payroll providers will be able to help them grasp the implications for their business and prepare them for their automatic enrolment responsibilities.
Payroll providers who offer auto enrolment services will naturally gain a competitive advantage, win new business and ultimately increase profits. According to The Pensions Regulator research 78% of small businesses will rely on their advisors for help, advice and support.
Win New Clients
Presumably you have worked hard to win and gain new clients. But now you've got those customers, how do you keep them? The downfall for many bureaus is that they don't know how to keep customers. Time and money goes into acquiring new customers and the last thing you want is to see them sneaking out the back door.
Keeping customers makes good business sense but it's not always easy. Being open for Auto enrolment business will play an important role in customer retention over the next few years. This will give payroll providers an edge over other bureaus who are shying away from AE and will provide the capacity to generate greater value for their clients.
There is a clear opportunity to financially benefit from AE by offering to handle all auto enrolment duties for your clients. Your services can lighten the load for employers. There is a pot of gold at the end of the rainbow and it’s up to you to grab it with both hands.
BrightPay has you covered!
To take advantage of this business opportunity, bureaus need to have a payroll solution that can automate the AE tasks. BrightPay is a payroll solution that has automatic enrolment process driven automation included for free. This simple solution handles the complex process of auto enrolment with ease. It's easy with BrightPay, simply enter your staging date and BrightPay will automatically let you know what you need to do to enrol the employees.
BrightPay automates the employee assessment for you by accessing each employees PAYE information and informing you what your duties are for each employee. It further can produce personalised employee communication based on the employee's work status which can be printed or emailed. Additionally, postponement, refunds, opt-out, opt-ins and required reporting come as standard. BrightPay is integrated with a number of AE pension providers.
What’s more is there are no additional costs for automatic enrolment functionality and support is completely free. Our 60 day trial will prove how easy it really is.
To arrange a demo click here
Feb 2015
23
Automatic Enrolment and Postponement
When a company reaches its staging date, it must automatically enrol all eligible employees into a qualifying pension scheme.
If it is not ready to enrol employees at the staging date, it can defer the enrolment of all employees for up to 3 months. This may be because it has not yet registered with a pension scheme or it may be because it doesn't have the necessary systems in place to handle assessments and contributions.
An essential part of postponement is communicating with all employees within 6 weeks of the staging date, letting them know that automatic enrolment has been deferred. If the company fails to issue these communications then postponement will never have happened and auto enrolment must be applied retrospectively to the staging date.
This is important as apparently some employers are interpreting postponement as not having to do anything for a 3 month period!
BrightPay prompts the user to print these letters before proceeding beyond the staging date.
Feb 2015
16
4 tips when setting up your automatic enrolment scheme with NEST
Before your staging date you should register with a qualifying automatic enrolment pension scheme. NEST operates one of these schemes and it will probably be the most popular scheme for small and micro businesses due to two main factors:
a] It is Government backed
b] It has a legal obligation to accept all employers who wish to use it to comply with the duties, irrespective of their size
Registering with NEST is fairly straightforward and should take you no more than half an hour. If you are going for the bog standard setup with the one minimum scheme for all employees, you have no delegates and you have your bank details to hand, the setup time could be as little as 10 minutes!
The four things to note or watch out for during the setup are:
1. Name of payment source. You'll be asked to put a name on the payment source you will be using to pay contributions. You can use any name you like e.g. Bank1. The thing to watch out for here is that when you enter the NEST details into BrightPay that you use the exact same name with the same uppercase and lowercase letters. If you enter "Bank1" in the NEST registration and then enter "bank1" in BrightPay, your csv file submissions will be rejected by NEST. Both names must be identical in all respects.
2. Group name. If you are just applying the one rule for all employees, then you will only have one group. You could call this group "Group1". Again it is vital that you enter the exact same name when entering the details in BrightPay.
3. Pay periods. If you pay your staff monthly, enter the start and end date of your actual pay period and NOT the tax period. BrightPay does not use tax periods for calculating contributions or for worker assessment.
4. Contribution rates and workers' pay. Again, assuming you are going for the bog standard, your contributions rates will be the current minimum and this will be calculated on qualifying earnings. Of course it’s also possible, and just as easy, to pay contributions above the minimum levels should you wish.
If you intend to have someone else look after your automatic enrolment duties e.g your accountant, bookkeeper or payroll bureau provider, you will need their details. NEST provides a checklist of details to obtain before you register with them. This can be found here.
Once you have completed your registration with NEST you should then enter the details in BrightPay. This should take no more than 3 minutes.
BrightPay will start enrolling employees once your staging date arrives (or give you the option to postpone for up to 3 months).
