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20 January 2017

Automaticenrolment and small employers

Even ifyou employ only one member of staff, who is employed on a temporary basis, whoearns under £10,000, and who does not need to be automatically enrolled into apension scheme, you will still have automatic enrolment duties that you need tomeet.

It'simportant that you are aware of what your duties are and when you need to meetthem by as you may incur a fine if you do not comply with the law on time.

Look out for a letter

The PensionsRegulator writes to all employers to alert them to their duties 12 monthsbefore their staging date. The stagingdate is when your legal duties start. Go to TPR's website and take 5 minutes tocomplete the online Duties Checker. This will help you understand how thelaw applies to you and what duties you have to do and by when and to avoidthe risk of a fine.

Are you an employer? 

You are anemployer if there is a contract of employment whether this is written orverbal between you and those who work for you. Even if someone who works foryou considers themselves self employed, you may still have employer duties.

Whiledeciding if someone is a worker may be clear-cut in many circumstances, it canbe more difficult in others. A person may be a classified as a worker if theymeet a number of criteria including:

  • whether you expect that person to personally carry out work for you (i.e. they cannot senda substitute),
  • if you provide what they need to carry out the work (for exampletools) ,
  • if you bear financial cost for faulty work.

Onceyou have decided who is a worker for automatic enrolment purposes, you mustthen check what your duties will involve and if any of them must be put into apension scheme.

If youdecide you are not an employer (e.g. you are a sole director company with noother staff) and so you do not have duties you should use the Duties Checker tolet TPR know this is the case.

If youdo not have any workers toautomatically enrol in to a pension, you still need to write to them to tellthem about automatic enrolment and how it applies to them. Template lettersthat you can use are available on TPRs website.

Complete and submit adeclaration of compliance

Whether or notyou have workers who must be put into a pension, you need to complete adeclaration of compliance and submit it to The Pensions Regulator to let themknow you have met your duties. The declaration of compliance shows TPR what youhave done to meet your duties and must be completed within five months of yourstaging date if you don't do this on time, you may incur a fine.

Bringing your stagingdate forward

If you don't have anyone who needs to be put into a pension scheme, you canbring your staging date forward to any date, so that you can meet your dutiesat a time that suits you.

You will need to tell TPR either on or before your newstaging date and you'll need to provide all of the information below:

  • Your PAYE reference - found on letters you have received from TPRabout automatic enrolment.
  • Your letter code - a 10 digit reference that appears on allcorrespondence from TPR about automatic enrolment.
  • Your current staging date and your new staging date.
  • Employer's name, address (including postcode) and email address.
  • If you have one, your Companies House registration number orequivalent, eg registered charity number, VAT registration number or industrialand provident society number.

Complete yourdeclaration of compliance at the same time

You can choose to complete your declaration of compliance at the same timeas you bring your staging date forward. Completing your declaration early meansyou can get this task out of the way and don't need to think about it anymore.

If you decide not to do this, you must complete yourdeclaration within five months after your new staging date.

Popular questions

Q: I do not have any staff to put into a pension scheme. Can I bring my deadlines forward?

If you do not have any staff to put into a pension scheme, you can bring forward your staging date and complete your declaration of compliance early. If you plan to bring your staging date forward you must notify The Pensions Regulator.

Q: We're a family business do automatic enrolment duties apply to us?

Whether you have duties will depend on your roles and if you have employment contracts in place. To find out if you have automatic enrolment duties, and what to do if you do not, complete the Duties Checker on TPRs website.

Q: I'm the only director of my own company do automatic enrolment duties apply to me?

If you are the sole director and you have no other staff working for you, the company does not have automatic enrolment duties. If you believe you don't have any automatic enrolment duties you will need to tell TPR that you're not an employer you can do this by completing the Duties Checker on TPRs website.

Duties Checker: www.tpr.gov.uk/ae-checker

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