Are There Exemptions to Auto-Enrolment for Workplace Pensions?
Workplace Pensions have been enshrined in law for quite some time now, and the process involved for companies to set up these schemes is called Auto-enrolment. Auto enrolment has been rolling out steadily, starting with the largest companies, and is now becoming a reality for smaller companies, most of whom will be required to operate workplace pension schemes by early 2017. Indeed every business in the UK must have completed the auto-enrolment process by early 2018.
For many small and micro-businesses, auto-enrolment can seem to be a complex and time consuming process, but there are exemptions from auto-enrolment meaning not everyone has to go through it. This article looks at who is exempt.
Exemptions to Auto-Enrolment
As you would expect, there is a huge amount of legislation around this area, which can be difficult to absorb and digest, but in a nutshell freelancers, contractors and micro-businesses might be exempt from auto-enrolment.
For example, if you run a company and your company has employees, even if there is only one employee, then your company is not exempt from auto-enrolment and must provide a workplace pension for the employee. However, if your business comprises only of directors, then you are legally exempt from providing a workplace pension.
Under these circumstances, it is a good idea to contact the Pension Regulator to inform them that you believe you are exempt once you receive your letter from them regarding auto-enrolment. You will need to:
Confirm that your limited company is not an employer and is exempt from auto-enrolment for any one of the following reasons:
- There is only one director and there are no other staff working for the company
- The only people working for the company are directors and none of them has an employment contract
- The only people working for the company are directors and only one of them has an employment contract
- The company has ceased trading
You’ll also need to tell them your 10 digit letter code, which will be on any letter they have sent you, your PAYE scheme reference and all the name and address details of your company
Contact Us for Help and Advice
As a payroll services expert, we can help if you have any questions about auto-enrolment. As you would expect we fully understand all the payroll requirements of auto-enrolment, buit we can also help with the setting up and on-going workings of your workplace pension scheme.
Contact us or call us on 0121 422 0550.