SMEs continue to underestimate pension auto-enrolment requirements

/ Posted By - Bradleys Accountants / Categories - Advice for Small Businesses

A sizeable proportion of small and medium enterprises (SMEs) continue to underrate the requirements of auto-enrolment pension laws. This is despite 6,000 businesses being less than 50 days away from their implementation date.

According to law firm, Irwin Mitchell, a large number of business owners are not aware of what they will be legally required to do. The firm was also concerned about the shortage of pension products for SMEs and the lack of availability of advice which could lead to hundreds missing the compliance deadline.

Nigel Bolton, of Irwin Mitchell, said: “We are pleased to say that many small and medium-sized businesses are ready, however we think that there are still many that do not fully appreciate what is involved and therefore will not be ready in time. Recent NEST research found that 20 per cent of businesses took 16 months in order to get ready for auto-enrolment. Although many of these organisations are much bigger than those that are yet to stage and have more employees to enrol, it should also be remembered that these larger companies have far bigger specialist support teams and functions.

    Subscribe to our newsletter

    "Although there is currently no online product which deals with all the issues associated with auto-enrolment, from providing the pension product to providing initial and follow-on legal compliance, we firmly believe it is clear that this is essential in ensuring smaller businesses deal effectively with this significant change to pension legislation."

    For UK’s biggest firms, pension auto-enrolment legislation came in to force in 2012 and businesses with a PAYE scheme size of 249-160 employees will need to comply by April 2014.

    While the staging dates for the smallest of businesses (fewer than 30 employees) is still not due till April 2016 onwards, all businesses with 90-160 employees and up are obliged to take part by July 2014. Businesses smaller than 50 employees don’t have to stage until after June 2015. If you know your PAYE scheme reference, visit The Pensions Regulator’s interactive staging date tool to look up your staging date.

    Since auto-enrolment is not only an HR, payroll or pensions issue, we advise you to get a team together to deal with this. It could mean using a local small business accountant in conjunction with whatever support you have internally.

    Related Articles

    Why are small businesses not using accounting…
    | Advice for Small Businesses

    All over the internet there’s advice on why businesses should switch to accounting software, particularly if they want to transition smoothly … Read more

    Download: Your Budget summary report & new…
    | Advice for Small Businesses

    Yesterday Philip Hammond delivered the 2017 Spring Budget speech of this Government. So what exactly did the Chancellor say and, more … Read more

    Spring Budget 2017 – key points for…
    | Advice for Small Businesses

    Today saw the unveiling of Hammond’s first – and last* – Spring Budget Statement, bringing with it as always tax changes, … Read more


    Subscribe to the newsletter

    Know about latest accountancy updates, company news and business growth tips. Every month, in your inbox

      Subscribe to our newsletter