TPR’s new animation on re-enrolment goes through the basics of re-enrolment, the steps your clients need to go through and when, and where to complete the re-declaration of compliance, which you can do on your client’s behalf.
Section 11 of TPR’s guidance tells you everything you need to know about re-enrolment, including re-enrolling certain staff outside the regular three-year period and also advanced guidance.
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£42k fine for auto enrolment non-compliance 10 May 2017
Johnsons Shoes Company had an automatic enrolment staging date of 1 May 2014 and were due to complete their declaration of compliance by 30 September 2014, but failed to meet the deadline. TPR had regularly attempted to communicate with Johnsons to educate and enable them to meet their duties, but their lack of action led TPR to use a number of their enforcement powers. Firstly a Fixed Penalty Notice (FPN) of £400 was issued. Johnsons refused to pay this and asked TPR to carry out a review of the FPN saying that pressures of work were to blame for not meeting their automatic enrolment duties. TPR do not consider this to be a reasonable excuse, as they had sent Johnsons several reminders in the 12 months before the date their duties began to apply and they’d had significant time to prepare.
An Escalating Penalty Notice (EPN) was issued; a £2,500 daily fine based on the number of employees in Johnsons PAYE scheme. This eventually amounted to £40,000.
Johnsons also failed to pay the EPN, so TPR lodged a money claim in the County Court to recover the debt. The end result being that Johnsons had to pay the fine in full, including the £2,000 court fee TPR had to pay to start the claim.
Johnsons are now compliant with their automatic enrolment duties and the staff in their pension scheme are in the same position as they would have been had Johnsons automatically enrolled them on the staging date.
As TPR state in their Regulatory intervention report , this case illustrates the need to engage early with them where they have identified non-compliance. Johnsons’ initial lack of action led to further delays in complying with their duties, and as a result the intervention escalated from a focus on remedial action to one of sanction and redress.
Had Johnsons acted quickly, a £40,000 fine, court action and a £2,000 court fee could have been avoided.
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Start-ups alerted to instant pensions duties 12 May 2017
New businesses which start up from October this year are being warned they will have instant pension duties as soon as they become employers.
The alert comes as the current schedule for employers to meet their automatic enrolment duties comes to an end. All businesses which existed before April 2012 have now passed their staging date.
Those who become employers for the first time on or after 1 October 2017 will immediately have legal duties for their new member of staff. These duties apply from the first day the first member of staff started working for them. This is known as their duties start date .
The Pensions Regulator (TPR) will write to new employers to tell them what they need to do and by when, and has also launched a new online suite of information and tools for new businesses and their advisers .
No PAYE scheme Automatic enrolment legal duties for new employers from 1 October 2017 begin from the first day the first member of staff starts working for them. If staff earn £113 per week (£490 a month) or below, then HMRC may not require the employer to set up a PAYE scheme. However, the employer does still have certain duties, and must start to complete them as soon as they employ their first member of staff:
The Chartered Institute of Payroll Professionals
Policy News Journal
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