Get to grips with the new auto enrolment pension rules for SMEs.
If you employ anybody, you need to start thinking about pensions. The buzzword is “auto enrolment” and we wrote about this a few weeks back.
I asked Will Wynne of Smart Pension to explain some of the headaches to Tamebay readers for several reasons.
Firstly, I know him. Secondly, he’s an employer himself. Thirdly, he understands eBay sellers and ecommerce SMEs like you. Will and I met when we were both working at eBay
Will says his new firm Smart Pension was founded to help solve auto enrolment for the UK’s small businesses at no cost to the business concerned.
“All UK businesses have auto enrolment responsibilities, and that includes eBay businesses.
Auto enrolment has the potential to be a major headache for UK SMEs for four main reasons:
Cost: Setting up a workplace pension can cost a lot of money if you choose the wrong provider. Many banks and insurance companies charge upfront fees (c £1,500 is a typical charge) and ongoing fees per employee.
Time: The auto enrolment process can be lengthy if you use an old fashioned provider, time that would be better spent running your business and making it more profitable. A lot of the providers’ systems don’t even generate the letters you need to send to your employees for you; you have to do them all manually yourself.
Penalties: If you do not set up a workplace pension before your staging date, you could face very high penalties – fixed penalties and escalating penalties that rise from £50 to £10,000 per day (though these highest fines are reserved only for the largest companies) – and, if you refuse to comply with the enforcement notices that The Pensions Regulator sends your way, up to two years in prison.
Admin: Finally, businesses have an ongoing responsibility to stay compliant, adding and removing joiners and leavers, as well as assessing employees as their rates of pay change. Failure to do so could also result in fines from The Pensions Regulator. Without the right platform, this can be very time consuming.”
Are you struggling with auto enrolment? Let us know what questions you need answered.