TPR flexes muscles on auto enrolment fines
The Pensions Regulator recently announced that the very first escalating fines had been issued to employers failing to comply with the new auto enrolment duties.Up until October 2014, only three £400 fixed penalty notices had been issued, meaning that the majority of the larger firms in the UK had successfully managed to meet their duties. Over the course of the next three months this figure suddenly increased by 166, with a further 198 issued in the first 3 months of 2015 alone.
For many of the larger employers advisers are already in place, as are resources and budgets which mean that they can adapt quickly to the changing legislation and ensure they are fully compliant. What we are seeing as the size of the employers staging reduces, is that the access to these things becomes more and more limited, ultimately resulting in a failure to comply.There are three stages of non-compliance:
- Firstly an unpaid contribution notice, carrying no monetary penalty
- The second stage is the aforementioned £400 fixed penalty notice
- The third is final escalating daily fine, dependant on the size of your firm.
Daniel Foy, auto enrolment specialist at Astute Wealth Management, said: “This can only be the beginning, it is The Pensions Regulator showing that they will get tough if they need to, and with the number of SME’s approaching chances are that the number of fines issued will increase rapidly."The daily penalties aren’t there to be given out for small admin errors in setting things up, you have to be doing something really wrong to get this far. If there are larger employers out there getting things this badly wrong, it really does concern me what will happen further down the line to the smaller, local shops such as your high street café.”
So far, it is estimated that around 49,000 employers have reached their staging dates and with over 1.2 million companies yet to stage awareness and planning is key.
He added, “Auto Enrolment is certainly here to stay and so the focus for SME’s has to shift to making the best out of it. Don’t treat this simply as a new piece of legislation, engage with it, consider it and make it work for your business in the best way possible.”