UPDATE: NOTICE THAT THE PENSION REGULATOR HAS STARTED ISSUING FINES TO BUSINESS OWNERS WHO HAVEN’T SET UP A WORK PLACE PENSION
In the past few weeks, we have been hearing reports from all parts of the that the Pension Regulator is getting tough with owners of small businesses who haven’t met their Pension Auto Enrolment (PAE) obligations to the Pension Regulations. We are receiving reports of massive fines.
The level of these fines is unprecedented and extraordinarily high.
For example, we have heard of one small business, with a turnover of less than £60,000 p.a., being hit with an initial fine of £900, then quickly followed by daily penalties of £500 per day. That’s £3,500 each week in fines.
All clients who have purchased payroll services from us will already be aware that we have been in regular contact with them, to make them aware that they must comply with the Pension Regulations. Those of you who have then subscribed to our Pension Auto Enrolment (PAE) service will have been made aware of how to comply.
Have you filed your Declaration of Compliance?
If you have decided to do it alone, and deal with compliance yourself, without our assistance, please check that you have fully complied, including having filed a Declaration of Compliance.
That is because it appears that the Pension regulator is checking all payroll registered schemes against their own records of those who have filed a Declaration of Compliance. Those who haven’t filed one will receive a penalty notice.
Please be aware that any business which operate a payroll scheme and hasn’t correctly or not filed a Declaration of Compliance with the regulator, will likely be subject to a fine. Therefore, we urge all clients with an HMRC registered payroll scheme to check that they are fully compliant.
What to do if you receive a penalty notice.
Firstly, make sure you comply with the Pension Regulations immediately.
Secondly, within 28 days from the date of the notice to appeal, you must apply to the Pension Regulator for a review.
Thirdly, if you disagree with the outcome of the review then you can appeal. Again, you need to do so urgently without delay.
Details on the review and appeals process is found below.
I don’t have a registered payroll scheme, what should I do?
For those clients who don’t have a HMRC registered payroll scheme, then we remind you of our previous advice and that is that you should make yourself aware of the Pension Regulations and check to see that you aren’t inadvertently caught by those regulation. For example, if you have workers who are paid wages, such a cleaners. You need to make sure that the amount you pay casual workers is below the qualifying levels for each worker as stipulated by the Pension Regulations. Carry out an audit of each casual works.
If you are a sole director of a limited company then it is possible for the company to be exempt from the Pension regulations, but you should apply accordance with the pension regulations. If, you don’t apply and don’t file a Declaration of Compliance, then you risk being fined.
NEVER FILE A FALSE DECLARATION OF COMPLIANCE.
We apologise if this email communications causes anxiety or worry. But we would rather make you aware of what we have discovered, and risk the odd annoyed comment from our clients, than have a single client subjected to the above excessive fines.