The fact is that if you miss your auto enrolment staging date then you will be fined. Like tax payments, there is little give in the big machine. If you can show evidence as to why you’ve missed your staging date for auto enrolment workplace pension regulations, you may be able to avoid fines and penalties. Our blog this week looks how to make your case to the regulator should you miss your staging date.
The idea behind auto enrolment is to ensure employees provide for themselves when they retire.
Your Auto Enrolment Responsibilities as an Employer
As an employer it is now your responsibility to ensure your employees are enrolled into an auto enrolment workplace pension scheme. Failure to comply with your staging date, or the date your employees join the scheme could incur severe fines and penalties.
If you cannot comply with your duties as an employer in relation to auto enrolment, the worst possible course of action to take is to ignore it. Here’s why;
The Pensions Regulator will begin take a number of steps. Each one a little more severe than the previous step until you have auto enrolment up and running:
- Non – statutory action: This will take the form of letters, emails and phone calls defining a set time period for compliance.
- Statutory action: Notices issued in this regard are likely to demand missed payment contributions, and possible interest charges in relation to missed workplace pension payments.
- Penalty notices: Penalty notices are likely to be issued if you persistently decide not to cooperate with auto enrolment requirements. Depending on your business size and circumstances, penalty notices can be issued up to £5,000 for individuals and up to £50,000 for organisations. Evidences of breaches may result in daily fines of £5,000.
- Court action: Wilful non – compliance will result in court action. This will result in a criminal prosecution against you.
You can get more information on penalties, and to learn more about auto enrolment from The Pension Regulator’s website.
Mitigating Missed Auto Enrolment Staging Dates
According to the Compliance and Enforcement Policy (click link to download PDF) issued by The Pensions Regulator, as an auto enrolment employer to show mitigating circumstances you should be able to show the following:
- You brought the matter to their attention
- There is no evidence of a systemic problem which caused the non compliance with auto enrolment and the impact is minimal on your employees.
- You are willing to cooperate with the Pensions Regulator to put everything in place quickly
- Should the non compliance be brought to your attention you accept you were in the wrong
It could be that you are a small employer or you were let down by a third party. In which case you will be able to show:
- A suitable reason for the non compliance. Perhaps a key member of staff has been absent, or circumstances beyond your control took precedent. The Pensions Regulator will want to see some form of evidence to back up this claim.
- A third party organisation was to blame for the non compliance, possibly an outside contractor hired to handle auto enrolment.
The Pensions regulator will look at cases on an individual basis before deciding what action to take. In general if you are going to miss your auto enrolment staging date, honesty is the best policy followed swiftly by cooperation to avoid action being taken against you. You can also enlist the services of a local auto enrolment specialist »
You can read more about the true cost of auto enrolment postponement from a previous article on the topic by clicking here.