Auto Enrolment and Non-Compliance Penalties

Is The Pensions Regulator Heavy Handed with Auto Enrolment Non-Compliance Penalties?

Workplace Pensions and Auto Enrolment have been with us for some time now, and most, if not all businesses will have an idea of what is expected of them. There are penalties for non-compliance, however, which can be severe. Although there is some evidence that The Pensions Regulator might be being heavy handed in handing out penalty notices, why take the risk of non-compliance? This article looks at the area of penalties and non-compliance, and finishes with a little about the importance of payroll in all of this.

A quick recap on the Employers’ responsibilities with AE

If you’re an employer, then it is your responsibility to comply with the Auto Enrolment rules. Compliance takes proper planning and time to do so, which can be a problem if you run a small business. If you don’t comply, the regulator can impose significant fines. More of that below.

The new regulations require employers to implement new systems, which involve pensions, payroll and HR, and these new systems will take time and cost money.

In our experience, time has been the biggest problem, once again especially so for smaller businesses where there isn’t a dedicated team or department to handle auto-enrolment. It’s often lack of time that leads to non-compliance.

What are the penalties for non-compliance?

There is a penalty of between £50 and £10,000 per day (depending on size) for companies failing to comply with a statutory penalty notice.

It seems that many recipients of penalty notices are rescinded when a request is made for a review. Indeed, more than 80% of businesses who asked for a review had their statutory notices altered or revoked.

Whilst that might imply that the regulator is being heavy-handed in the first place, with it being good advice to always ask for a review, the process can still cause uncertainty and stress. Better in our view to plan and comply.

We Can Help

Here at JLP, we can help by ensuring your payroll systems are fully compliant with the requirements of Auto Enrolment. We can also help with the Auto Enrolment process itself.

All of this can be time consuming. We can help. Make early contact with us and with your Company’s existing professional advisers, and together we’ll help you sort it out, and avoid a penalty notice.

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